The Effects of State-Level Medicaid Coverage on Family Wealth.

Abstract

Jointly financed by the federal government and the states, Medicaid represents the second largest form of public-sector investment in children. Research documents direct positive effects of Medicaid on children's well-being, but little is known about the effects of Medicaid expansions on the wealth of families with children. Using state variation in Medicaid access during the prenatal and infant period, linked to longitudinal data from the children of National Longitudinal Survey of Youth 79, we ask whether state-level Medicaid generosity is associated with family wealth among families with children and whether these effects vary by parental education and race-ethnicity. We find that greater state-level Medicaid access is associated with a larger total amount held in savings and retirement accounts, as well as in mortgages. These effects are largely driven by non-Hispanic white families, and those with more highly educated mothers.