The Long-run Effects of Medicaid on Disability Applications

This paper estimates the long-run effects of childhood Medicaid eligibility on Social Security Disability Insurance (DI) applications using the program’s original introduction (1966-1970) and its mandated coverage of welfare recipients. We construct a state-of-birth by year-of-birth panel using the 1996-2008 Surveys of Income and Program Participation. The design compares cohorts born in different years relative to Medicaid implementation, in states with different pre-existing welfare-based eligibility. The results show that early childhood Medicaid coverage is associated with lower application rates. This is consistent with reductions in DI participation stemming from lower application rates rather than higher rejection rates.