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Why Did the SSI-Disabled Program Grow So Much? Disentangling the Effect of Medicaid

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  • Aaron Yelowitz
Abstract
The number of participants in the SSI program grew by 1.1 million from 1987 to 1993. This paper examines the role of Medicaid on the SSI participation decision. I use the rapid growth in average Medicaid expenditure as a proxy for its value. OLS estimates of Medicaid's effect may be biased because of omitted variables bias and measurement error. I therefore apply two-stage least squares to estimate Medicaid's effect, using average Medicaid expenditure for blind SSI recipients as an instrument. These estimates show that rising Medicaid expenditure significantly increased SSI participation among adults with low permanent incomes, explaining 20 percent of the growth.

Suggested Citation

  • Aaron Yelowitz, 1997. "Why Did the SSI-Disabled Program Grow So Much? Disentangling the Effect of Medicaid," NBER Working Papers 6139, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:6139
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    Cited by:

    1. Jonathan Gruber, 2003. "Medicaid," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 15-78, National Bureau of Economic Research, Inc.
    2. Jonathan Gruber & Brigitte C. Madrian, 2002. "Health Insurance, Labor Supply, and Job Mobility: A Critical Review of the Literature," JCPR Working Papers 255, Northwestern University/University of Chicago Joint Center for Poverty Research.
    3. Lahiri, Kajal & Song, Jae & Wixon, Bernard, 2008. "A model of Social Security Disability Insurance using matched SIPP/Administrative data," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 4-20, July.
    4. Heim, Bradley & Lurie, Ithai & Mullen, Kathleen J. & Simon, Kosali, 2021. "How Much Do Outside Options Matter? The Effect of Subsidized Health Insurance on Social Security Disability Insurance Benefit Receipt," Journal of Health Economics, Elsevier, vol. 76(C).
    5. Timothy Callaghan & Lawrence R. Jacobs, 2014. "Process Learning and the Implementation of Medicaid Reform," Publius: The Journal of Federalism, CSF Associates Inc., vol. 44(4), pages 541-563.
    6. Elizabeth T. Powers & David Neumark, 2003. "The Supplemental Security Income Program and Incentives to Claim Social Security Retirement Early: Empirical Evidence from Matched SIPP and Social Security Administrative Files," Working Papers wp036, University of Michigan, Michigan Retirement Research Center.
    7. Yelowitz, Aaron S, 2000. "Using the Medicare Buy-In Program to Estimate the Effect of Medicaid on SSI Participation," Economic Inquiry, Western Economic Association International, vol. 38(3), pages 419-441, July.
    8. Todd Elder & Elizabeth Powers, 2006. "Public Health Insurance and SSI Program Participation Among the Aged," Working Papers wp117, University of Michigan, Michigan Retirement Research Center.
    9. Gina Livermore & David Stapleton & Henry Claypool, "undated". "Costs and Benefits of Eliminating the Medicare Waiting Period for SSDI Beneficiaries," Mathematica Policy Research Reports 3a68e4d07af1446f9f08dd214, Mathematica Policy Research.
    10. Brigitte C. Madrian, 2005. "The U.S. health care system and labor markets," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 50(Jun), pages 137-163.
    11. James Marton & Aaron Yelowitz, 2015. "Health insurance generosity and conditional coverage: Evidence from medicaid managed care in Kentucky," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 535-555, October.
    12. repec:eee:labchp:v:3:y:1999:i:pc:p:3417-3528 is not listed on IDEAS
    13. repec:mrr:papers:wp341 is not listed on IDEAS
    14. Craig, Steven G. & Howard, Larry L., 2014. "Is Medicaid crowding out other state government expenditure? Internal financing and cross-program substitution," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 164-178.
    15. Mary Daly & Richard V. Burkhauser, 2003. "The Supplemental Security Income Program," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 79-140, National Bureau of Economic Research, Inc.
    16. Jonathan Gruber, 1998. "Health Insurance and the Labor Market," NBER Working Papers 6762, National Bureau of Economic Research, Inc.
    17. Elizabeth Powers & David Neumark, 2001. "The Supplemental Security Income Program and Incentives to Take Up Social Security Early Retirement: Empirical Evidence from Matched SIPP and Social.," NBER Working Papers 8670, National Bureau of Economic Research, Inc.
    18. Jonathan Gruber, 1997. "Health Insurance for Poor Women and Children in the US: Lessons from the Past Decade," NBER Chapters, in: Tax Policy and the Economy, Volume 11, pages 169-211, National Bureau of Economic Research, Inc.
    19. Meyer, Bruce D. & Sullivan, James X., 2004. "The effects of welfare and tax reform: the material well-being of single mothers in the 1980s and 1990s," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1387-1420, July.
    20. Burns, Marguerite & Dague, Laura, 2017. "The effect of expanding Medicaid eligibility on Supplemental Security Income program participation," Journal of Public Economics, Elsevier, vol. 149(C), pages 20-34.
    21. Akinori Tomohara & Ho Lee, 2007. "Did State Children’s Health Insurance Program Affect Married Women’s Labor Supply?," Journal of Family and Economic Issues, Springer, vol. 28(4), pages 668-683, December.
    22. repec:mpr:mprres:6218 is not listed on IDEAS
    23. Larry Howard, 2014. "Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998–2004," International Journal of Health Economics and Management, Springer, vol. 14(3), pages 229-250, September.

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    More about this item

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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