Spousal Labor Market Effects from Government Health Insurance: Evidence from a Veterans Affairs Expansion

job hours on the intensive margin, adding more hours to a part-time job. Women
with more education may be more likely to retain or obtain full-time employment.

B. Data

This study uses data for the years 1992 through 2002 from the Census
Bureau’s March Current Population Survey (CPS). The CPS includes consistent
information on employment and demographic controls, including veteran status,
at an annual level for these years. Using a difference-in-differences (DD)
estimation strategy, we compare the labor supply choices of wives of veterans and
wives of non-veterans before and after the restructuring of VA health care. We
thus limit our sample to married couples. Because we are mimicking the effects
of a public insurance expansion for those approaching the current age of Medicare
eligibility, we focus on individuals approaching retirement by limiting the sample
to individuals ages 55 through 64.⁷ Additionally, because of the small number of
female veterans in this age cohort we restrict our veteran sample to include only
males. We delete from our sample couples for which the wife is a veteran, as
these wives will be directly affected by the treatment.⁸ With these restrictions, the

⁷ Medicare eligibility at age 65 affects the impact of other public health insurance on the work
decision, so we do not include those ages. In general, we find that the significance of results is
slightly stronger if we limit to those age 50-64 rather than 55-64, possibly because of a larger
sample size.

⁸ We also delete the two observations for which the wife is under the age of 18. The results are
nearly identical when these are not deleted. We have also run regressions limiting wife ages to 45-

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