Panel Paper: Investing in Health and Public Safety: Childhood Medicaid Eligibility and Later Life Criminal Behavior

Friday, November 8, 2019
Plaza Building: Lobby Level, Director's Row E (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Logan J. Hendrix and Wendy Stock, Montana State University

A growing body of research is helping to inform the public dialog surrounding the provision of public health insurance. We contribute to this literature by examining the long-term impacts of childhood Medicaid eligibility on later life criminal behavior. Using variation stemming from Medicaid expansions of the 1980s-1990s, we estimate the impact of Medicaid eligibility during childhood on crime rates during early adulthood. To account for the endogeneity of economic and demographic characteristics that influence both Medicaid eligibility and criminal behavior, we utilize the simulated eligibility approach developed by Currie and Gruber (1996) and Cutler and Gruber (1996), to isolate changes in state-level eligibility due to changes in Medicaid policy from changes in eligibility due to other economic or demographic factors. We use this exogenous measure of eligibility to instrument for the fraction of children who were eligible for Medicaid across states, years, and birth cohorts. We then link this eligibility measure to arrest rate data from the FBI’s Uniform Crime Reporting System to examine the effects of childhood Medicaid eligibility on criminal behavior during early adulthood.

We find that increased Medicaid eligibility during childhood generates large and statistically significant reductions in crime during early adulthood. An additional year of eligibility during childhood generates a three percent decrease in violent crime, an eleven percent decrease in property crime, an eight percent decrease in drug-related crime, and a four percent decrease in DUI arrests. Our findings are robust to alternative sample constructions and model specifications; to the inclusion of other variables potentially linked to health and crime, including measures of welfare program generosity, lead exposure, and abortion policy during childhood; as well as to the inclusion of gun control policy and measures of alcohol consumption during adulthood.

Our results are consistent with other work finding long-term impacts of public health insurance that go beyond improving recipients' health. Beyond the policy implications, because of Medicaid’s capacity to affect general and mental health, family resources, and home environment, our findings also contribute to a growing understanding of the early determinants of criminal behavior.

Full Paper: