Open AccessLabour market returns to health capital during childhood: Evidence from Medicaid introduction
Author(s) -
Hamid Noghanibehambari
Publication year - 2021
Publication title -
economic annals/ekonomski anali
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.148
H-Index - 12
eISSN - 1820-7375
pISSN - 0013-3264
DOI - 10.2298/eka2129099n
Subject(s) - medicaid , economics , externality , wage , demographic economics , affect (linguistics) , human capital , labour economics , capital (architecture) , health care , economic growth , geography , psychology , communication , archaeology , microeconomics
Health capital development during childhood can affect later-life outcomes. This paper examines the long-term effects of the introduction of Medicaid during the 1960s as one of the earliest attempts in US history to provide publicly financed health insurance for the poor. Using a large panel dataset and a difference-in-differences- in-differences identification strategy, I show that exposure to Medicaid during ages 0-5 has sizable and significant effects on economic and non-economic outcomes throughout ages 25-55, including income, employment, education, disability, and wealth. Exposure to Medicaid among fully eligible cohorts is associated with roughly 0.4 percentage higher wage income, equivalent to an increase of $145 above the mean of annual wages. It also implies a minimum of 7.8% externality of the programme in labour market wages.