The Effect of Public Insurance Eligibility for Childless Adults on Their Labor Supply

Laura Dague, Texas A&M University
Thomas DeLeire, University of Wisconsin-Madison
Lindsey Leininger, University of Illinois at Chicago

This study provides the first plausibly causal estimates of the effect of public insurance eligibility on the employment and earnings of non-elderly, non-disabled adults without dependent children (“childless adults”). Our study uses both propensity score matching with differences-in-differences and a regression discontinuity approach that takes advantage of the sudden imposition of an enrollment cap to compare the labor supply of enrollees with applicants placed on a waitlist. We find that enrollment into public insurance leads to a 3-4 percentage-point reduction in the probability of employment 29 months later. In light of these results, policymakers should be prepared for a reduction in labor supply among those affected by the Medicaid expansion to childless adults under the Affordable Care Act (ACA).