Finance and Economics Vision
Volume 1 nos.1 December 2022 ISSN 2755-3272
We use cross-sectional data from the 2014 American Community Survey to estimate the heterogeneous treatment effects of expanding Medicaid on health insurance coverage. In doing so, we provide
robust evidence which can help policymakers target future Medicaid policies towards particularly
responsive individuals. Medicaid expansions were optional by state, allowing us to identify treatment effects by comparing expansion and non-expansion states. We then estimate heterogeneous
treatment effects using a non-parametric machine learning algorithm called a causal forest, which
offers several advantages over prior methods in the literature. Most notably, it provides a systematic
means to discover, from the data, which variables are most relevant for modelling heterogeneity. We
find strong evidence of heterogeneity in our estimated treatment effects. Furthermore, we find that
individuals with the largest treatment effects were typically aged 25-34; had a high school diploma
as their highest level of education; spoke a language other than English at home; and/or were in
private for-profit employment.
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