| Sumario: | Using a pooled cross-section data set from the 1980 through 1993 Current Population Survey March Supplements, we test if different Medicaid benefit levels across states impact the labor supply behavior of female heads of households. The ordinary least square (OLS) results support the prediction that Medicaid expenditures reduce labor supply. Controlling for state fixed or random effects alter the effects of both AFDC and Medicaid on the decision to participate as well as the number of hours worked. We also find that while the effects of program generosity are sensitive to the inclusion of state effects those of variation in eligibility thresholds are not. Reprinted by permission of Western Economic International 7400 Center Ave., Ste. 109, Huntington Beach, CA 92647-3039, USA Ph. 1-714-898-3222, Fax 1-714-891-6715 E-mail info@weainternational.org http://www.weainternational.org.
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