This study contributes to recent work on the relationship between minimum wages and health by examining potential underlying mechanisms. Specifically, the roles of health insurance, health care access and utilization are explored. By analyzing Current Population Survey data for the years 1989–2009 and by estimating DD models, I find that higher minimum wages increase health insurance coverage, in particular individually purchased insurance, among low-educated individuals. By estimating data from the Behavioral Risk Factor Surveillance System for the same period, I furthermore provide evidence for improvements in health care access/affordability and increased health care utilization following minimum wage increases.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
Tax calculation will be finalised during checkout.
Several states were missing in the BRFSS in the early years of the analysis: Alaska (1989–1990), Arkansas (1989, 1990 and 1992), Colorado (1989), Delaware (1989), the District of Columbia (1995), Kansas (1989–1991), Louisiana (1989), Mississippi (1989), Nevada (1989–1991), New Jersey (1989–1990), Rhode Island (1994), Vermont (1989) and Wyoming (1989–1993). In additional specifications, I find that the results remain similar when using a balanced panel, which suggests that the main estimates are not driven by different compositions of the control group states.
The data for state-level EITC programs are obtained from Tax Credits for Working Families, Tax Policy Center of the Urban Institute and Brookings Institution, and the National Conference of State Legislatures.
The data for the timing of TANF and for statewide waivers are obtained from the US Department of Health & Human Services.
In additional specification, I control for marital status, which is excluded from the main models since it could be argued that it is potentially an outcome of minimum wages and therefore a “bad control” (Angrist and Pischke 2009). The results remain unchanged when including marital status from the analysis.
In additional models, I replace state-specific linear time trends with state-specific quadratic time trends. In line with previous work by Horn et al. (2017), the estimates remain very similar.
In line with previous work on health-related effects of minimum wages (Horn et al. 2017), the results in my study are robust to the use of nonlinear model.
While Horn et al. (2017) use the same first comparison group, their second group consists of college-educated adults between the ages 18 and 54.
When using lead minimum wage rates, I find that the results are substantially smaller while still showing the same direction. The only outcome for which the estimate shows any statistical significance (p < 0.10) is individually purchased coverage. The analysis of leads in the framework of this study is not ideal to capture pre-treatment trends and potential anticipatory effects because states with effective minimum wages above the federal level increased their rates several times throughout the study period.
These numbers correspond to employee single contributions for all firm sizes using and are obtained using data from the Medical Expenditure Panel Survey – Insurance Component (MEPS-IC).
In additional tests for of exogeneity, I find that minimum wages are not impacted by any of the outcome variables examined in this study or by state unemployment rates, which suggests that reverse causality is not driving the main findings of the analysis. These results are not shown in the paper, but are available upon request.
Aaronson, Daniel, Sumit Agarwal, and Eric French. 2012. The Spending and Debt Response to Minimum Wage Hikes. American Economic Review 102(7): 3111–3139.
Adams, Scott, McKinley L. Blackburn, and Chad D. Cotti. 2012. Minimum Wages and Alcohol-Related Traffic Fatalities among Teens. The Review of Economics and Statistics 94(3): 828–840.
Adams, Scott, Chad Cotti, and Nathan Tefft. 2015. Seatbelt Use Among Drunk Drivers in Different Legislative Settings. Economic Inquiry 53(1): 758–772.
Adler, Nancy E., and Katherine Newman. 2002. Socioeconomic Disparities in Health: Pathways and Policies. Health Affairs 21(2): 60–76.
Andreyeva, Elena, and Benjamin Ukert. 2018. The Impact of the Minimum Wage on Health. International Journal of Health Economics and Management 18(4): 337–375.
Angrist, Joshua D., and Jörn-Steffen Pischke. 2009. Mostly Harmless Econometrics: An Empiricist’s Companion, 2009. Princeton: Princeton University Press.
Autor, David H., Alan Manning, and Christopher L. Smith. 2016. The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment. American Economic Journal: Applied Economics 8(1): 58–99.
Averett, Susan L., Julie K. Smith, and Yang Wang. 2017. The Effects of Minimum Wages on the Health of Working Teenagers. Applied Economics Letters 24(16): 1127–1130.
Burkhauser, Richard V., and Joseph J. Sabia. 2007. The Effectiveness of Minimum-Wage Increases in Reducing Poverty: Past, Present, and Future. Contemporary Economic Policy 25(2): 262–281.
Card, David, and Alan B. Krueger. 1995. Myth and Measurement: The New Economics of the Minimum Wage. Princeton, NJ: Princeton University Press.
Courtemanche, Charles. 2009. Rising Cigarette Prices and Rising Obesity: Coincidence or Unintended Consequence? Journal of Health Economics 28(4): 781–798.
Courtemanche, Charles. 2011. A Silver Lining? The Connection between Gasoline Prices and Obesity. Economic Inquiry 49(3): 935–957.
Cutler, David M. 2003. Employee Costs and the Decline in Health Insurance Coverage. In Frontiers in Health Policy Research, ed. D. M. Cutler and A. M. Garber. Cambridge, MA: MIT Press.
DiNardo, John, Nicole M. Fortin, and Thomas Lemieux. 1996. Labor Market Institutions and the Distribution of Wages, 1973–1992: A Semi-Parametric Approach. Econometrica 64(5): 1001–1044.
Du, Juan, and J.Paul Leigh. 2018. Effects of Minimum Wages on Absence from Work Due to Illness. The B.E. Journal of Economic Analysis & Policy. https://doi.org/10.1515/bejeap-2017-0097.
Fernández Campbell, Alexia. 2019a. The $15 Minimum Wage Bill has all But Died in the Senate. Vox. https://www.vox.com/2019/8/16/20807610/raise-the-wage-act-15-minimum-wage-bill. Accessed 16 Sept 2019.
Fernández Campbell, Alexia. 2019b. Where the 2020 Candidates Stand on Raising the Federal Minimum Wage. Vox. https://www.vox.com/2019/6/26/18715588/democratic-candidates-minimum-wage-2020. Accessed 16 Sept 2019.
Garfield, Rachel, Kendal Orgera, and Anthony Damico. 2019. The Uninsured and the ACA: A Primer—Key Facts about Health Insurance and the Uninsured amidst Changes to the Affordable Care Act. Kaiser Family Foundation. https://www.kff.org/report-section/the-uninsured-and-the-aca-a-primer-key-facts-about-health-insurance-and-the-uninsured-amidst-changes-to-the-affordable-care-act-who-remains-uninsured-after-the-aca-and-why-do-they/. Accessed 20 Mar 2019.
Greene, William. 2004. The Behaviour of the Maximum Likelihood Estimator of Limited Dependent Variable Models in the Presence of Fixed Effects. The Econometrics Journal 7(1): 98–119.
Grossman, Michael. 1972. On the Concept of Health Capital and the Demand for Health. Journal of Political Economy 80(2): 223–255.
Helliwell, John F., and Haifang Huang. 2014. New Measures of the Costs of Unemployment: Evidence from the Subjective Well-Being of 3.3 Million Americans. Economic Inquiry 52(4): 1485–1502.
Horn, Brady P., Johanna C. Maclean, and Michael R. Strain. 2017. Do Minimum Wage Increases Influence Workers Health? Economic Inquiry 55(4): 1986–2007.
Kaiser Family Foundation. 2018. Key Facts About the Uninsured Population. https://www.kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/. Accessed 20 Mar 2019.
Kronenberg, Christoph, Rowena Jacobs, and Eugenio Zucchelli. 2017. The Impact of the UK National Minimum Wage on Mental Health. SSM—Population Health 3(December): 749–755.
Lee, David S. 1999. Wage Inequality in the United States During the 1980s: Rising Dispersion or Falling Minimum Wage? Quarterly Journal of Economics 114(3): 977–1023.
Lenhart, Otto. 2017a. Do Higher Minimum Wages Benefit Health? Evidence from the UK. Journal of Policy Analysis and Management 36(4): 828–852.
Lenhart, Otto. 2017b. The Impact of Minimum Wages on Population Health: Evidence from 24 OECD Countries. The European Journal of Health Economics 18(8): 1031–1039.
Maclean, Johanna C., Douglas A. Webber, and J. Joachim Marti. 2014. An Application of Unconditional Quantile Regression to Cigarette Taxes. Journal of Policy Analysis and Management 33(1): 188–210.
Marks, Mindy S. 2011. Minimum Wages, Employer-Provided Health Insurance, and the Non-Discrimination Laws. Industrial Relations 50(2): 241–262.
Meltzer, David O., and Zhuo Chen. 2011. The Impact of Minimum Wage Rates on Body Weight in the United States. National Bureau of Economic Research, Economic Aspects of Obesity. http://www.nber.org/chapters/c11815. Accessed 14 Apr 2017.
Mincer, Jacob. 1976. Unemployment Effects of Minimum Wages. Journal of Political Economy 84(4): S87–S104.
Neumark, David, and William Wascher. 2002. Do Minimum Wages Fight Poverty? Economic Inquiry 40(3): 315–333.
Neumark, David, Ian Salas Salas, and William Wascher. 2014. Revisiting the Minimum Wage—Employment Debate: Throwing Out the Baby with the Bathwater? Industrial and Labor Relations Review 67(3 suppl.): 608–648.
Norton, Edward C. 2012. Log Odds and Ends. NBER Working Paper No. 18252. Cambridge, MA: National Bureau of Economic Research.
Reeves, Aaron, Martin McKee, Johan Mackenbach, Margaret Whitehead, and David Stuckler. 2017. Introduction of a National Minimum Wage Reduced Depressive Symptoms in Low-Wage Workers: A Quasi-Natural Experiment in the UK. Health Economics 26: 639–655.
Rho, Hye J., and John Schmitt. 2010. Health-Insurance Coverage Rates for US Workers, 1979–2008. Center for Economic and Policy Research. http://cepr.net/documents/publications/hc-coverage-2010-03.pdf. Accessed 20 Mar 2019.
Royalty, Anne B. 2000. Do Minimum Wage Increases Lower the Probability that Low-Skilled Workers Will Receive Fringe Benefits? Joint Center for Poverty Research Working Paper 222.
Sabia, Joseph J., Melinda M. Pitts, and Laura M. Argys. 2019. Are Minimum Wages a Silent Killer? New Evidence on Drunk Driving Fatalities. Review of Economics and Statistics 101(1): 192–199.
Simon, Kosali I., and Robert Kaestner. 2004. Do Minimum Wages Affect Non-Wage Job Attributes? Evidence on Fringe Benefits. Industrial and Labor Relations Review 58(1): 52–70.
Summers, Lawrence H. 1989. Some Simple Economics of Mandated Benefits. The American Economic Review 79: 177–183.
Ullmann, Darin F. 2017. The Effect of Medical Marijuana on Sickness Absence. Health Economics 26(10): 1322–1327.
United States Minimum Wage Study Commission. 1983. Report of the Minimum Wage Study Commission. United States. Minimum Wage Study Commission.
Vistnes, Jessica, Alice Zawacki, Kosali Simon, and Amy Taylor. 2012. Declines in Employer-Sponsored Insurance between 2000 and 2008: Examining the Components of Coverage by Form Size. Health Services Research 47(3 Pt 1): 919–938.
Wehby, George, Dhaval Dave, and Robert Kaestner. 2016. Effects of the Minimum Wage on Infant Health. NBER Working Paper No. 22373, 2016, http://www.nber.org/papers/w22373. Accessed 2 Sep 2017.
Zipperer, Ben. (2018). The Erosion of the Federal Minimum Wage has Increased Poverty, Especially for Black and Hispanic Families. Economic Policy Institute. https://www.epi.org/publication/the-erosion-of-the-federal-minimum-wage-has-increased-poverty-especially-for-black-and-hispanic-families/. Accessed 24 Jan 2019.
I thank Catherine Maclean, anonymous referees, seminar participants at the University of Konstanz and participants at the Minimum Wages and Health session at the 8th Annual Conference of the American Society of Health Economists (2019).
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
About this article
Cite this article
Lenhart, O. Pathways Between Minimum Wages and Health: The Roles of Health Insurance, Health Care Access and Health Care Utilization. Eastern Econ J 46, 438–459 (2020). https://doi.org/10.1057/s41302-019-00152-5
- Minimum wages
- Health care access
- Health behaviors