Full Citation
Title: Does Public Health Insurance Increase Self-Employment? Evidence from Medicaid Expansions
Citation Type: Miscellaneous
Publication Year: 2015
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Abstract: Most health insurance in the United States is provided through employers, making it difficult and costly for self-employed individuals to obtain insurance in private markets. Some economists have argued that an increase in public health insurance, such as the Medicaid expansions allowed under the Affordable Care Act, would increase self employment and encourage entrepreneurship. However, little is known about the role health insurance, and particularly public health insurance, plays in self-employment decisions. Between 1988 and 1990, Congress passed a series of legislative reforms that increased Medicaid coverage for young children. I use variation in the initial income thresholds, childrens age cutoffs and timing of implementation across states to estimate the effect of a persons youngest child gaining access to this public health insurance on self-employment. I find that having a child become Medicaid eligible increases a fathers self-employment by 10.5 percentage points and increases business income by $1,269 (2005 dollars). I find no significant effect on self-employment for mothers, but I find that the Medicaid eligibility of their youngest child is associated with a large negative effect on their probability of remaining in a wage or salary job (-31.4 percentage points.) Further investigation shows that this effect only holds for married mothers, which is consistent with households reducing their hours worked in order to keep household income below the eligibility thresholds.
Url: http://www.rickidolan.com/syllabus/dolan_jobmarketpaper.pdf
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Authors: Dolan, Ricki
Publisher: University of Texas at Austin, Department of Economics
Data Collections: IPUMS CPS
Topics: Health, Other
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