The Long-Run Effects of Childhood Insurance Coverage: Medicaid Implementation, Adult Disability and Labor Market Outcomes

This paper estimates the effects of Medicaid's introduction on adult outcomes for those covered as children.  I exploit the implementation of Medicaid between 1966 and 1970 and cross-state differences in eligibility arising from the requirement that Medicaid cover welfare recipients.  The empirical approach is a difference-in-differences design that compares cohorts in the 2000-2013 Census/ACS who were born in the years leading up to or following Medicaid (first difference) and in states with higher or lower pre-existing welfare-based Medicaid eligibility (second difference).  The results suggest that childhood Medicaid coverage reduces adult disability and increases employment for respondents in their 40s and 50s.  Personal income is not affected because higher earnings replace lower disability benefits, but both effects imply government savings.