Association for Public Policy Analysis & Management

This study contributes to the small literature studying the effects of Medicaid eligibility on children’s education (Levine and Schanzenbach 2009; Cohodes et al. 2016). We examine the contemporaneous effects of childhood Medicaid expansions on education using administrative school records from North Carolina. In particular, we exploit plausibly exogenous variation in childhood Medicaid eligibility generated by a unique feature of early Medicaid expansions that extended eligibility only to children born after September 30, 1983. Wherry and Meyer (2016), and Wherry et al. (2017) demonstrated that this Medicaid expansion leads to a significant increase in the rate of Medicaid eligibility and in the cumulative number of years a child was eligible for Medicaid during childhood across the birthdate cutoff.

We follow these two papers in utilizing this plausibly exogenous variation in Medicaid eligibility around the September 30, 1983 birthdate cutoff. This allows us to study the effect of Medicaid eligibility expansion between the ages of 8-14 on academic outcomes measured when the children are 13 years of age. We estimate effects of the Medicaid expansion on outcomes including the grade level of the child, whether the child is below grade, and measures of reading proficiency and math proficiency. We also investigate effects on potential mechanisms including number of days a child is absent from school and whether a child has a reported disability.

We find that the Medicaid expansion significantly increases the grade level a child is observed in, and that it significantly reduces the likelihood that the child is below grade. Our estimates indicate that the Medicaid expansion is associated with a 2.4 percentage point reduction in the probability that a child is below grade which is an 8 percent reduction compared to the mean for children born just before the cutoff. While we find that the Medicaid expansion significantly impacts the grade level of children, there are no statistically detectable effects on reading and math proficiency. We also do not find any significant effects on absences from school or the likelihood of a child having a documented disability. We also investigate heterogeneity in the effects of the Medicaid expansion by race, gender, and school district poverty rates.

Our findings make several contributions to the literature evaluating the effects of Medicaid. First, given the past findings of long term effects of childhood Medicaid expansions on educational attainment, our analysis is able to investigate effects in the immediate term to show that these effects emerge contemporaneously. Second, our analysis of the effect of Medicaid expansions on potential mechanisms of absences and documented disabilities contributes to our understanding of how Medicaid may affect educational attainment. Our finding that the Medicaid expansion has no significant effect on disabilities and absences, along with the significant heterogeneity in results by gender suggests that the main mechanism through which Medicaid affects education may be through improving family resources rather than improving contemporaneous health.