Replication data for: Does State Fiscal Relief during Recessions Increase Employment? Evidence from the American Recovery and Reinvestment Act

William Gui Woolston, Gabriel Chodorow-Reich, Zachary Liscow & Laura Feiveson
The American Recovery and Reinvestment Act (ARRA) of 2009 included $88 billion of aid to state governments administered through the Medicaid reimbursement process. We examine the effect of these transfers on states' employment. Because state fiscal relief outlays are endogenous to a state's economic environment, OLS results are biased downward. We address this problem by using a state's prerecession Medicaid spending level to instrument for ARRA state fiscal relief. In our preferred specification, a state's...
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