Opportunity Policy

Early-life Medicaid Coverage and Intergenerational Economic Mobility

Abstract

New data reveal significant variation in economic mobility outcomes across U.S. localities. This suggests that social structures, institutions, and public policies—particularly those that influence critical early-life environments—play an important role in shaping mobility processes. Using new county-level estimates of intergenerational economic mobility for children born between 1980 and 1986, we exploit the uneven expansions of Medicaid eligibility across states to isolate the causal effect of this specific policy change on mobility outcomes. Instrumental-variable regression models reveal that increasing the proportion of low-income pregnant women eligible for Medicaid improved the mobility outcomes of their children in adulthood. We find no evidence that Medicaid coverage in later childhood years influences mobility outcomes. This study has implications for the normative evaluation of this policy intervention as well as our understanding of mobility processes in an era of rising inequality.