(Withdrawn) Minimum Wage, Maximum Health? the Effects of Minimum Wage Increases on Health and Well-Being in the United States

Background and Purpose: Evidence on the effects of minimum wage on health, mental health, and well-being is inconsistent. Several studies in recent years find that increases in minimum wage provide health benefits, while others find null effects and a few find deleterious effects in some sub-populations. This inconsistency in findings may relate in part to the presence of heterogeneous effects within a period of observation. Studies with long periods of observation may be unable to detect effects if these operate in opposite directions, with average treatment effects potentially masking meaningful heterogeneity in treatment effects. This study aims to examine dynamic treatment effects of minimum wage increases on self-rated health, number of poor physical health days, number of poor mental health days, and number of days with functional limitations within the period 2010-2018.

Methods: Utilizing data from the Behavioral Risk Factor Surveillance Survey, we leverage the variability in minimum wage across states and time to estimate difference-in-difference models for two sub-periods, 2010-2014 and 2015-2018. For both periods, we estimate OLS and negative binomial distribution (NBD) models for continuous and count data, respectively. In subsequent analyses, we also estimate the effect of minimum wage increases at or above $9.25 on our health outcomes utilizing doubly robust difference-in-difference (DR-DID) models for multiple time periods, a method that allows for a more granular observation of treatment effects by year cohorts and that provides a weighted aggregate treatment effect. This approach seeks to overcome the limitations of traditional difference-in-difference models in which two-way fixed effects assume static effects.

Results: For the period 2010-2014, OLS and NBD models indicate that minimum wage increases were associated with improvements in self-rated health and decreases in the number of poor physical health days. Effects of the minimum wage increases on mental health and impairment are very small and nonsignificant (NS). For years 2015-2018, which include sizable increases in nominal and real minimum wage across several states, our models suggest smaller and NS health effects on self-rated and physical health. The effects on mental health and functional limitations were also NS, although the direction of the relationship suggests an increase in functional limitations. Our DR-DID analysis for 2015-2018 indicates that minimum wage increases at or above $9.25 for years were associated with a significant improvement in physical health. While other aggregate treatment effects are NS, the 2017 treatment cohort experienced an improvement in self-rated health and reduction in days with functional limitations, albeit a slight worsening in mental health.

Conclusion & Implications: Our findings suggest that changes to the minimum wage have heterogeneous effects on health outcomes within the period 2010-2018, with the majority of improvement occurring for physical health outcomes. This study highlights the importance of examining potentially heterogeneous effects of the minimum wage over time. Our future research plans will include analyses of dynamic wage effects by sub-populations more likely to be affected by minimum wage increases.