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Kids who get health insurance are more likely to finish high school and college

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We know health insurance influences health — but can it change educational outcomes, too? A new study says yes.

The paper, recently published by the National Bureau of Economic Research, examined expansions of Medicaid in the 1980s and 1990s. The authors found that the expansions resulted in consistent improvements in high school and college attainment.

A 10 percentage point increase in childhood Medicaid eligibility reduced the rate of high school dropouts by 5 percent and increased completion of a bachelor's degree by 3.3 to 3.7 percent.

Previous research has demonstrated a positive short-term relationship between access to health care and education — when schools offer health care services to students, attendance rates rise and teen pregnancies fall — but this paper is the first to look at educational impacts over a longer time frame.

Two things could cause access to health insurance to influence educational achievement. The first is pretty straightforward — access to insurance could make kids healthier and healthier kids could do better in school. But there's also a potential indirect effect — giving families health insurance could increase the financial resources they have available for non-health expenses, and that could help kids do well in school. The way the study is constructed doesn't let us tell how much of the impact is coming from the insurance per se and how much is simply the financial benefit.

The authors argue that Medicaid's long-run returns on education may be even more important than the short-term health gains that insurance could provide. The families affected by these insurance expansions are the same families that have shown the slowest growth in educational attainment over the last three decades.

Moreover, the authors write, "part of the return to these expansions is a potential reduction in inequality and higher economic growth that stems from the creation of a skilled workforce."

Childhood uninsurance isn't the problem it once was, but about ten percent of kids remained uninsured in 2013. The majority of these children — an estimated 70 percent — are actually eligible for coverage through Medicaid or CHIP (a public insurance program for children that falls under Medicaid's umbrella).

It's estimated that Obamacare will reduce the number of uninsured children by 40 percent. That number probably isn't as high as we'd like — but the long-term impact on the newly-insured might be better than we expected.