Archive for the ‘Institute for Research on Poverty’ Category

Medicaid and Intergenerational Economic Mobility

April 2, 2015 Comments off

Medicaid and Intergenerational Economic Mobility
Source: Institute for Research in Poverty (University of Wisconsin)

Previous research demonstrates that the Medicaid expansions of the 1980s and 1990s had lasting effects on the health, education and labor market outcomes of children. Yet to date there has been no direct test of the effect of Medicaid expansions on intergenerational economic mobility. Using new commuting zone level estimates of economic mobility for children born between 1980 and 1993, we exploit the uneven expansions of Medicaid eligibility across states to isolate the causal effect of this policy change on mobility outcomes. Regression models using simulated state-year specific eligibility criteria as an instrument for expanding coverage demonstrate that increasing the proportion of women aged 15–44 eligible for Medicaid is associated with a reduction in the correlation between the income ranks of parents and their children in adulthood. We further find the Medicaid expansions increased the probability that children born to low-income parents experience absolute upward mobility. These findings suggest early exposure to health insurance may be a key policy lever for promoting intergenerational mobility and economic opportunity.

Conditional Cash Transfers and College Persistence: Evidence from a Randomized Need-Based Grant Program

July 9, 2011 Comments off

Conditional Cash Transfers and College Persistence: Evidence from a Randomized Need-Based Grant Program (PDF)
Source: Institute for Research on Poverty

We use the random assignment of a private Wisconsin need-based grant to estimate the impacts of financial aid on college persistence among Pell Grant recipients at 13 public universities over three years. For equity and efficiency reasons, governments use conditional cash transfers to reduce the relationship between family income and college attainment, but prior research suggests that financial aid generates only modest positive effects. This is the first experimental study of a program resembling the longstanding federal Pell Grant program, but with fewer paperwork requirements and an award process that facilitates the identification of effects on college persistence, independent of initial college choice. We find that on average the grant increased neither enrollment nor credit attainment; the only notable positive average treatment effect was a 28 percent increase in the proportion of students completing 60 credits over two years but this was offset by a reduction in credits among other students. An exploratory analysis further suggests that the program’s small average treatment effects mask considerable heterogeneity. In particular, it appears that students with a low (pre-randomization) propensity to persist in college received sizable positive benefits from the cash transfer, while students who were already more likely to persist in college received no benefit, and some may have been negatively affected. Thus, results from this experimental study suggest that the modest effects of conditional cash transfers for low- income university students primarily operate on credits rather than enrollment, and these could be enhanced with better targeting. More generally, we find that students respond to formal cash incentives in unexpected ways.