Association for Public Policy Analysis & Management

Experiencing a poor environment in early life leads to worse health and human capital outcomes in adulthood (Almond and Currie, 201) and public policy interventions that improve the early-life environment can have significant long-run benefits (Aizer et.al., 2016; Brown et. al., 2015; Cohodes et al., forthcoming; Hoynes et. al., 2016; Isen et. al., forthcoming; Miller and Wherry, 2015). However, it is unclear whether the beneficial impacts of early-life interventions persist into future generations. In this paper we examine whether the effects of public health insurance transfer across generations by investigating whether women who had access to Medicaid in childhood give birth to healthier children. Using a simulated instruments strategy pioneered by Currie and Gruber (1996) combined with information on the health outcomes of the universe of births in the United States, we document that Medicaid has intergenerational benefits. Our results provide the first evidence that the beneficial effects of safety net programs persist beyond the generation that participate in these programs, and suggest that the total benefits of these programs may be larger than previously believed.