Essays in Applied Economics and Public Policy

In the first chapter, I look into the long-term effects of the receipt of child Supplemental Security Income (SSI) on the siblings to whom the SSI benefits are directly targeted and the spillover effects on the other siblings in the family without a disability. Siblings in households where a child has a disability are often disadvantaged as parents need to divert a high proportion of their resources, time, and energy to the child with a disability in the family (Abrams, 2009). In 1990, the Zebley reform took place which made it easier for children with intellectual disabilities to obtain SSI. This historic decision passed by the U.S. Supreme Court in the Sullivan vs Zebley case allowed children with intellectual disabilities, previously not considered disabled for SSI purposes, to receive child SSI benefits for disability. Exploiting the quasi-experimental variation induced by the Zebley decision, I employ a difference-in-differences model. The model estimates the intent-to-treat effects of being eligible for Zebley for an additional year on the outcomes of the children with Zebley affected intellectual disabilities and their siblings with no disabilities. Being eligible for SSI for an additional year increases the number of years of schooling completed by the Zebley eligible child, and also increases the probability that the other siblings in the family complete high school by age 19, earn a higher income, and have private health insurance coverage at the age of 25. In the second chapter, I study the effects of the Balancing Incentives Program (BIP) which was passed in 2010 as part of the Affordable Care Act. BIP provided states with federal funds to implement structural reforms to promote access to long-term services and encourage waivers providing Medicaid coverage in home and community based settings. For non-elderly with disabilities, BIP had the potential to reduce costs of requiring long-term care in terms of earnings and education forgone as the program made it easier for them to obtain Medicaid coverage for long-term care at home and community based settings as opposed to having to receive long-term care at an institutional setting. Using quasi-experimental variation induced by BIP, I investigate the causal effects of BIP on living arrangements, SSI receipt, labor force attachment, earnings, and house-ownership for individuals aged sixteen to sixty-four. Exploiting the eligibility criteria for BIP, I take BIP eligible and participating states as treated states and BIP ineligible states as control states and implement a difference-in-differences design with two-way fixed effects considering the group requiring assistance with daily living activities as the group affected by BIP. The results highlight the positive effects of BIP on increasing college graduation rate by age 22, labor force participation, earned personal income, and the probability of being covered by health insurance. However, my results also indicate causal effects of BIP in increasing SSI uptake and amount and negative effects on house-ownership. The effects, although statistically significant, are small in terms of magnitude.