Econ Active Research Lunch - Lunch @ 11:30am, Presentation @ 12L00pm in UH850
Presenter: Jiajia Chen
Do Children on Medicaid Benefit from a Weak Labor Market? Evidence from the Great Recession
Using administrative data on Medicaid claims, I obtain estimates of the association between weak labor market conditions and the quantity of office-based services received by children enrolled in Medicaid. I find that children receive more services in areas with higher unemployment. The effect could reflect either demand factors such as worsening health or supply factors such as changes in the number of physicians willing to accept Medicaid patients. Using variation in local unemployment rate induced by the Great Recession, I provide evidence that are inconsistent with the demand-side explanations. Instead, the finding supports a supply-side mechanism: higher unemployment reduces the demand for physician services by privately-insured patients. Physicians respond to the demand shock by treating more Medicaid enrollees. The increased primary care visits are associated with reduced hospitalization, suggesting that there are welfare gains from improving access to and use of primary care services for Medicaid enrollees.