This paper investigates the pre/post labor market implications of the Affordable
Care Act's (ACA) Medicaid expansion for a population near the eligibility cutoff.
Using an arguably exogenous variation at the eligibility cutoff, I find that Medicaid
enrollment increases for adults without dependent children. This leads to an
employment transition from full-time (≥35 Hrs) to part-time employment (<35
Hrs) after the expansion. The employment transition is mainly driven by the
increase in employment for working less than 20 hours. Falsicification checks
show no effect on employment for non-expansion states and Medicare-eligible
adult groups. The estimates are robust to the inclusion of early expansion states,
increasing bandwidths, and various functional forms of the running variable. These
findings imply that individuals primarly work to secure private health insurance
("employment-lock") prior to the expansion. When replicating the existing studies
that use a difference-in-differences (DD) model with expansion states as the
treatment group, I find no employment effects. The main limitation of this DD
model is the large and heterogeneous treatment group that includes adults who
are less likely to be eligible for Medicaid.
Keywords: ACA's Medicaid expansion; labor market outcomes; employment-lock;
difference-in-discontinuities
JEL Codes: C21, J21, J26, I10
Last updated on 10/31/2017
