+ Site Statistics
+ Search Articles
+ PDF Full Text Service
How our service works
Request PDF Full Text
+ Follow Us
Follow on Facebook
Follow on Twitter
Follow on LinkedIn
+ Subscribe to Site Feeds
Most Shared
PDF Full Text
+ Translate
+ Recently Requested

The effect of Medicaid wage pass-through programs on the wages of direct care workers



The effect of Medicaid wage pass-through programs on the wages of direct care workers



Medical Care 48(5): 426-432



Despite growing demand for nursing and home health care as the US population ages, compensation levels in the low-skill nursing labor market that provides the bulk of long-term care remain quite low. The challenge facing providers of long-term care is that Medicaid reimbursement rates for nursing home and home health care severely restrict the wage growth that is necessary to attract workers, resulting in high turnover and labor shortages. Almost half of US states have responded by enacting "pass-through" provisions in their Medicaid programs, channeling additional long-term care funding directly to compensation of lower-skill nursing workers. We test the effect of Medicaid wage pass-through programs on hourly wages for direct care workers. We estimate several specifications of wage models using employment data from the 1996 and 2001 panels of the Survey of Income and Program Participation for nursing, home health, and personal care aides. The effect of pass-through programs is identified by an indicator variable for states with programs; 20 states adopted pass-throughs during the sample period. Workers in states with pass-through programs earn as much as 12% more per hour than workers in other states after those programs are implemented. Medicaid wage pass-through programs appear to be a viable policy option for raising compensation levels of direct care workers, with an eye toward improving recruitment and retention in long-term care settings.

Please choose payment method:






(PDF emailed within 0-6 h: $19.90)

Accession: 056295816

Download citation: RISBibTeXText

PMID: 20393361

DOI: 10.1097/mlr.0b013e3181d6888a


Related references

Improving direct-care compensation in nursing homes: Medicaid wage pass-through adoption, 1999-2004. Journal of Health Politics, Policy and Law 37(3): 469-512, 2012

The Effect of Wage Payment Reform on Workers Labor Supply, Wages, and Welfare. The Journal of Economic History 72(4): 1064-1087, 2012

Do Medicaid wage pass-through payments increase nursing home staffing?. Health Services Research 45(3): 728-747, 2010

Minimum wage increase could raise many rural workers wages. Rural development perspectives: RDP 11(3): 23-30, 1996

Cities, Workers, and Wages: A Structural Analysis of the Urban Wage Premium. Review of economic studies 74(2): 477-506, 2007

The gender wage gap and the role of reservation wages: New evidence for unemployed workers. Journal of Economic Behavior & Organization 136: 161-173, 2017

Minimum wage impacts on wages and hours worked of low-income workers in Ecuador. World Development 116: 77-99, 2019

Medicaid programs brace for new home health wage rule. Modern Healthcare 45(44): 12, 2016

Medicaid Program; The Use of New or Increased Pass-Through Payments in Medicaid Managed Care Delivery Systems. Final rule. Federal Register 82(11): 5415-5429, 2017

Compensating Wage Differentials versus Efficiency Wages: An Empirical Study of Job Autonomy and Wages. Industrial Relations: A Journal of Economy and Society 33(2): 249-262, 1994

Estimating the Impact of Minimum Wages on Employment, Wages, and Non-Wage Benefits: The Case of Agriculture in South Africa. American Journal of Agricultural Economics 96(5): 1402-1419, 2014

Survey of farm wages and wage-earners in 1972-1973. Wage structure and levels. Cahiers de Statistique Agricole (20): 47-59, 1975

Improving the effectiveness of the wage system of health workers through analytical evaluation. System of stimulating wages. Ceskoslovenske Zdravotnictvi 24(1): 18-25, 1976

Are Chinese Workers Paid the Correct Wages? Measuring Wage Underpayment in the Chinese Industrial Sector, 2005-2010. Review of Radical Political Economics 47(3): 446-459, 2015

Notice to quit as a weapon. New wage policies provides equitable wages in health care. Interview by Kaj Nyman. Vardfacket 13(9): 26-27, 1989