CFDP 1979

Medicaid as an Investment in Children: What is the Long-Term Impact on Tax Receipts?

Author(s): 

Publication Date: January 2015

Pages: 38

Abstract: 

We use administrative data from the IRS to examine the long-term impact of childhood Medicaid expansions. We use eligibility variation by cohort and state that we can relate to outcomes graphically. We find that children with greater Medicaid eligibility paid more in cumulative taxes by age 28. They collected less in EITC payments, and the women had higher cumulative wages. Our estimates imply that the government will recoup 56 cents of each dollar spent on childhood Medicaid by the time these children reach age 60. This return does not include estimated private gains from increased college attendance and decreased mortality.

Keywords: 

Health insurance, Simulated instrument, Mortality, EITC

JEL Classification Codes:  H2, I1, I38