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In the early 2000s, Arizona, Maine, New Mexico, New York, Oregon, and Vermont expanded Medicaid to cover more low-income individuals, primarily childless adults. This change provides the researcher with an opportunity to analyze the effects of these expansions on labor supply and welfare enrollment. I use a large data set of 176 counties over 7 years, including 3 years of pre-expansion period, 1 year of implementation year, and 3 years of post-expansion period. Using a difference-in-differences approach, I find the most-affected counties had a 1.4 percentage-point more decline in labor force participation rate in comparison to other counties. Furthermore, I observe a 0.32 h decrease in average weekly hours and a 1.1 % increase in average weekly wages. This indicates labor supply was affected more than labor demand. I also observe a 0.49 % increase in Supplemental Nutrition Assistance Program (SNAP) enrollment after the Medicaid expansions. These results are robust to an alternative identification of the most-affected counties, inclusion of counties from comparison states, limiting the control group to only high-poverty counties from comparison states, exclusion of county-specific time trends, and different configuration of clustered errors. My findings provide early insights on the potential effects of new Medicaid expansions of the Affordable Care Act (ACA), since 82 % of those newly eligible are expected to be childless adults.

How did medicaid expansions affect labor supply and welfare enrollment? Evidence from the early 2000s