This paper exploits a major mid-1990s expansion in the U.S. Department of Veterans Affairs health care system to provide evidence on the labor market effects of expanding health insurance availability. Using data from the Current Population Survey, we employ a difference-in-differences strategy to compare the labor market behavior of older veterans and non-veterans before and after the VA health benefits expansion to test the impact of public health insurance on labor supply. We find that older workers are significantly more likely to decrease work both on the extensive and intensive margins after receiving access to non-employer based insurance. Workers with some college education or a college degree are more likely to transition into self-employment, a result consistent with “job-lock” effects. However, less-educated workers are more likely to leave self-employment, a result suggesting that the positive income effect from receiving public insurance dominates the “job-lock” effect for these workers. Some relatively disadvantaged sub-populations may also increase their labor supply after gaining greater access to public insurance, consistent with complementary positive health effects of health care access or decreased work disincentives for these groups. We conclude that this reform has affected employment and retirement decisions, and suggest that future moves toward universal coverage or expansions of Medicare are likely to have significant labor market effects.

The authors use existing, nationally representative surveys to assess the economic characteristics of individuals in three categories of seniors housing and care facilities: independent living communities (ILCs), assisted living residences (ALRs), and continuing care retirement communities (CCRCs). The findings highlight the strengths and weaknesses of using the Health and Retirement Study, National Long-Term Care Survey, and Medicare Current Beneficiary Survey to describe this segment of the population. The results suggest that residents in ILCs and ALRs have lower average incomes than the average costs of these care communities. Conversely, CCRC residents have higher incomes and more assets than those living in private homes, suggesting that CCRCs attract the wealthiest seniors. However, longitudinal analysis is prohibited by the small sample sizes.

Congressional earmarks have been the subject of significant political debate in recent years. Also known as "pork barrel spending," earmarks are budgetary requests made by a single legislator that typically circumvent the traditional competitive bidding process designed to ensure the efficient use of public dollars. Utilizing annual state-level estimates of pork barrel spending, we briefly examine the factors influencing states' receipt of earmarked funds from Congress. Results indicate that on average smaller states receive the largest amount of per capita earmarked funding, most likely as a result of their disproportionate influence in the Senate. In addition, the presence of a Republican Congressional delegation increases pork spending in the state. Finally, the tenure of a state's senior Senator has a large effect on the state's receipt of earmarked funds. Each additional year of Senate experience by a state's senior Senator results in a $4.48 increase in earmarked dollars per capita for that state's residents.

No abstract

Measuring the total impact of health insurance receipt on household labor supply is important in an era of increased access to publicly-provided and subsidized insurance. Although government expansion of health insurance to older workers leads to direct labor supply reductions for recipients, there may be spillover effects on the labor supply of uncovered spouses. While the most basic model predicts a decrease in overall household work hours, financial incentives such as credit constraints, target income levels, and the need for own health insurance suggest that spousal labor supply might increase. In contrast, complementarities of spousal leisure would predict a decrease in labor supply for both spouses. Utilizing a mid-1990s expansion of health insurance for U.S. veterans, we provide evidence on the effects of public insurance availability on the labor supply of spouses. Using data from the Current Population Survey and Health and Retirement Study, we employ a difference-in-differences strategy to compare the labor market behavior of the wives of older male veterans and non-veterans before and after the VA health benefits expansion. Although husbands’ labor supply decreases, wives’ labor supply increases, suggesting that financial incentives dominate complementarities of spousal leisure. This effect is strongest for wives with lower education levels and lower levels of household wealth and those who were not previously employed full-time. These findings have implications for government programs such as Medicare and Social Security and the Affordable Care Act. JEL codes: H4, I1, J2