The Impact of Youth Medicaid Eligibility on Adult Incarceration

Abstract

This paper identifies an important spillover associated with public health insurance: reduced incarceration. In 1990, Congress passed legislation that increased Medicaid eligibility for individuals born after September 30, 1983. We show that Black children born just after the cutoff are 5 percent less likely to be incarcerated by age 28, driven primarily by a decrease in incarcerations connected to financially motivated offenses. Children of other races, who experienced almost no gain in Medicaid coverage as a result of the policy, demonstrate no such decline. We find that reduced incarceration in adulthood substantially offsets the initial costs of expanding eligibility. (JEL H51, I13, I18, I38, J15, K42)