Health Insurance and Labor Supply: Evidence from the Affordable Care Act Early Medicaid Expansion in Connecticut
46 Pages Posted: 29 May 2016 Last revised: 16 Jun 2016
Date Written: June 15, 2016
This paper examines how health insurance affects labor supply by exploiting a quasi-experimental change in health insurance provision under the Affordable Care Act (ACA) early Medicaid expansion in Connecticut implemented in 2010. Applying an instrumental variables approach to a difference-in-differences-in-differences strategy, I find remarkable labor supply impacts of the ACA early Medicaid expansion in Connecticut. I show evidence that Connecticut's Medicaid expansion increased Medicaid coverage for low-income childless adults by 5.9 percentage points, and as a result reduced the employment rate by 3.8 to 4.5 percentage points among those low-income childless adults.
Keywords: Affordable Care Act, Medicaid, Labor Supply
JEL Classification: I13, I18, J22
Suggested Citation: Suggested Citation