Working Paper: NBER ID: w9803
Authors: John C. Ham; Lara D. Shoresheppard
Abstract: Using data from the 1988-1996 Current Population Surveys (CPS), we re-examine the evidence presented in Yelowitz (1995) showing that expansions in Medicaid eligibility for children were associated with increased labor force participation and reduced participation in Aid to Families with Dependent Children (AFDC) among single mothers. We find that Yelowitz's results were the result of two factors. First, he imposed a strong restriction on the parameter estimates that is not predicted by theory and is rejected in the CPS data. Second, he used only one of the two income tests that families must pass to be eligible for AFDC, resulting in higher imputed AFDC breakeven income levels for larger families. Once these problems are addressed, the Medicaid income limits have no significant effect on AFDC participation. The AFDC income limits, however, are significantly related to welfare and labor force participation in both his original sample and the entire 1988-1996 sample.
Keywords: No keywords provided
JEL Codes: I38; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Medicaid income limits (I18) | AFDC participation (I38) |
| AFDC income limits (I38) | welfare participation (I38) |
| AFDC income limits (I38) | labor force participation (J22) |
| Medicaid income limits (I18) | labor force participation (J22) |