where pij is the probability that person i living in state j is covered by employer-sponsored
insurance;Wij is a vector of socioeconomic characteristics defined below; and mij gives the
probability that the person is covered by Medicaid.
Two related obstacles prevent a straightforward estimation of the structural model in
Eq. (3). The first is that we do not observe the probability that a particular person receives
Medicaid or is covered by ESI. Instead, we simply observe the outcome of these probability
processes for a particular person. For example, the person is either covered by Medicaid