Medicaid,AFDC and family formation

This paper uses the fact that states joined the Medicaid programme at different times between early 1966 and early 1970 to estimate the effect of health insurance availability on childbearing and marital choice. Data on women aged 15 to 45 during the 1964 to 1972 period from the March Current Population Survey (CPS) is used to estimate Medicaid's effect on the probability that a woman has recently given birth and is not married. It is found that the introduction of Medicaid led to a small but statistically significant increase in the probability that a woman is single and has recently given birth. Specifically, the introduction of Medicaid led to a 0.3 percentage point increase in the probability that a woman is a single mother of young children. This is an approximately 10% increase relative to the average fraction of single mothers in the sample of about 3%. Although nonwhite women are on average more likely to be single mothers than white women are, it is found that Medicaid did not significantly contribute to the formation of nonwhite female-headed families. In contrast, Medicaid led to an approximately 14% increase in the probability that a white woman is a single mother.