The Impact of State Government Partisan Composition on Health Outcomes through Taxation and Healthcare Spending

This paper examines the relationship between the partisan composition of state governments and healthcare in that state. It first shows the theoretical conditions which impact taxation and healthcare spending policies. This theory supports the notion that divided governments produce better healthcare outcomes for individuals than unified state governments. These theoretical conditions are then tested empirically in four iterations. The first iteration considers the direct relationships posited by the theoretical model as stand-alone equations. The second iteration adds variables designed to control for demographic and economic conditions in each state and evaluates the impact of a state’s decision to expand Medicaid. The third iteration of these relationships is a simultaneous estimation of the first iteration. Simultaneous estimation addresses the existence of several variables as both dependent variables in certain equations and independent variables in others. The fourth iteration simultaneously estimates the relationships with the inclusion of state level control variables and an analysis of whether or not a state chose to expand Medicaid. The theoretical results suggest that health outcomes can be altered on a short time horizon by state governments through policy. However, this assertion fails to hold up when properly modeled and the results suggest that state governments do not have a discernable effect on the health outcomes of their citizens on Medicaid. The only finding of the theoretical model that holds up to rigorous econometric examination is that government complexion significantly impacts the tax rate in a state as unified state governments increase taxes in the states they control.Bachelor of Art