Eligibility Recertification and Dynamic Opt-in Incentives in Income-tested Social Programs: Evidence from Medicaid/CHIP

Authors

Zhuan Pei, Cornell UniversityFollow

Publication Date

8-1-2015

Series

Upjohn Institute working paper ; 15-234

DOI

10.17848/wp15-234

Abstract

Conventional labor supply studies assume constant eligibility monitoring of income-tested program participants, but this is not true for most programs. For example, states can allow children to enroll in Medicaid/CHIP for 12 months regardless of family income changes. A long recertification period reduces monitoring costs but is predicted to induce program participation by temporary income adjustments. However, I find little evidence of strategic behavior from the 2001 and 2004 Survey of Income and Program Participation. Given the lack of dynamic responses, I propose a framework to compute the optimal recertification period and find 12 months to be its lower bound.

Issue Date

August 2015

Subject Areas

LABOR MARKET ISSUES; Wages, health insurance and other benefits; Health insurance; UNEMPLOYMENT, DISABILITY, and INCOME SUPPORT PROGRAMS; Poverty and income support; Income support programs