Determinants of Employment: Impact of Medicaid and Chip Among Unmarried Female Heads of Household With Young Children

Background and Purpose: This research explores whether participation in Medicaid is a determinant of hours of employment among unmarried parenting female heads of households with at least one child under the age of 6. The objective is to investigate whether the generosity of income eligibility guidelines of Medicaid select low-income women into limited hours of employment. This study examines labor market participation by including Medicaid in the labor supply utility function as a welfare benefit.  It is hypothesized that workers who participate in Medicaid or have children who participate in CHIP are more likely to reduce their hours of employment to ensure health insurance coverage.  Additionally, it is hypothesized that those in poorer health will decrease their hours of employment since maintaining health care is more essential to their health.  It is expected that hours of employment would be greater for the households in states with more generous Medicaid eligibility rules.

Methods: A multilevel regression was conducted using secondary data from the Current Population Survey 2011 Annual Social and Economic Supplement.  The sample included unmarried parenting female heads of households with at least one child under the age of 6. The original data set includes a sample of 204,983 individuals and was narrowed to unmarried female heads of household’s aged 18-64 who have at least one child under the age of 6 and whom were financially eligible for Medicaid. The sample was restricted since unmarried female heads of households make up the majority of Medicaid participants and show greater variance in their labor supply choices to their male counterparts.  The study examined social welfare benefits and labor force participation by exploring four measures to represent the determinants of employment: Medicaid participation, CHIP participation, health status, and Medicaid generosity.

Results: The findings indicate that Medicaid participation, health status, and Medicaid generosity all have a significant effect on labor force participation when measured by hours of employment per week. Medicaid participation was found to have a significant impact on hours worked per week at an expected increase of 6.074 hours of work per week. For those who responded to being in good, fair or poor health, there was a negative impact on hours of employment. States with low generosity did have a significant impact on hours of employment per week when compared to those states with average generosity, showing an expected decrease in 5.554 hours.

Conclusions and Implications: By identifying Medicaid as a determinant of hours of employment per week, this paper examined whether this population is engaging in limited work. While the data does not offer reasons for why these women are limiting work, the data strongly suggest there is an effort to maintain Medicaid benefits as a safety net if they are unable to find full-time employment with other health insurance options. These findings offer important insights to inform welfare and healthcare policy, in particular Medicaid and the provision of health care to those in need.