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Hamersma study Medicaid earning limits and earnings growths among poor people published in JEAP

Jul 31, 2013

The Effects of Medicaid Earnings Limits on Earnings Growth among Poor Workers

Sarah Hamersma

The B.E. Journal of Economic Analysis & Policy, July 2013

Sarah Hamersma headshot

Sarah Hamersma

Strict earnings limits for public health insurance eligibility may distort work incentives for low-earning workers. Since 1996, states may vary their parental Medicaid eligibility criteria independently of other assistance programs. The result is substantial variation across states and over time in the earnings thresholds to which workers must adhere to maintain eligibility. Utilizing this variation, the author identifies the effects of Medicaid earnings thresholds on labor force behavior of low-income single mothers, examining both static and dynamic patterns. They find some evidence that allocating government funds to increasing these thresholds could be used as a policy lever to help drive increased earnings among low-income women.