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Medicaid Expansion Did Not Result In Significant Employment Changes Or Job Reductions In 2014

Author: Angshuman Gooptu, Asako S. Moriya, Kosali I. Simon, Benjamin D. Sommers
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Medicaid expansion undertaken through the Affordable Care Act (ACA) is already producing major changes in insurance coverage and access to care, but its potential impacts on the labor market are also important policy considerations. Economic theory suggests that receipt of Medicaid might benefit workers who would no longer be tied to specific jobs to receive health insurance (known as job lock), giving them more flexibility in their choice of employment, or might encourage low-income workers to reduce their hours or stop working if they no longer need employment-based insurance. Evidence on labor changes after previous Medicaid expansions is mixed. To view the impact of the ACA on current labor market participation, we analyzed labor-market participation among adults with incomes below 138 percent of the federal poverty level, comparing Medicaid expansion and nonexpansion states and Medicaid-eligible and -ineligible groups, for the pre-ACA period (2005–13) and the first fifteen months of the expansion (January 2014–March 2015). Medicaid expansion did not result in significant changes in employment, job switching, or full- versus part-time status. While we cannot exclude the possibility of small changes in these outcomes, our findings rule out the large change found in one influential pre-ACA study; furthermore, they suggest that the Medicaid expansion has had limited impact on labor-market outcomes thus far.

Medicaid expansion undertaken through the Affordable Care Act (ACA) is already producing major changes in insurance coverage and access to care, but its potential impacts on the labor market are also important policy considerations. Economic theory suggests that receipt of Medicaid might benefit workers who would no longer be tied to specific jobs to receive health insurance (known as job lock), giving them more flexibility in their choice of employment, or might encourage low-income workers to reduce their hours or stop working if they no longer need employment-based insurance. Evidence on labor changes after previous Medicaid expansions is mixed. To view the impact of the ACA on current labor market participation, we analyzed labor-market participation among adults with incomes below 138 percent of the federal poverty level, comparing Medicaid expansion and nonexpansion states and Medicaid-eligible and -ineligible groups, for the pre-ACA period (2005–13) and the first fifteen months of the expansion (January 2014–March 2015). Medicaid expansion did not result in significant changes in employment, job switching, or full- versus part-time status. While we cannot exclude the possibility of small changes in these outcomes, our findings rule out the large change found in one influential pre-ACA study; furthermore, they suggest that the Medicaid expansion has had limited impact on labor-market outcomes thus far.

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