Effects of Minimum Wages on Absence from Work Due to Illness

54 Pages Posted: 16 Nov 2017

See all articles by Juan Du

Juan Du

Old Dominion University - Strome College of Business

J. Paul Leigh

University of California, Davis - Department of Public Health Sciences

Date Written: November 13, 2017

Abstract

Using longitudinal data from the Panel Study of Income Dynamics for 1997-2013 and difference-in-differences (DD) and difference-in-difference-in-differences (DDD) techniques, we estimate the effects of minimum wages on absence from work due to own and others’ (such as children’s) illnesses. We use person fixed effects within both linear and two-part models, the latter to explore changes at extensive and intensive margins. A lower educated group (likely affected by minimum wages) is compared with higher educated groups (likely unaffected). Within the lower educated group, we find higher minimum wages are associated with lower rates of absence due to own and others’ illness combined and due to own illness alone, but not associated with absence due to others’ illness. A $1 increase in the real minimum wage results in 19% (in DD model) and 32% (DDD) decreases in the absence rate due to own illness evaluated at the mean. These findings are strongest for persons who are not employed year-round and among the lowest wage earners. In additional analysis, we show that these effects are likely not due to changes in labor supply or job-related attributes. Instead, we find a possible mechanism: higher minimum wages improve self-reported health for lower educated workers.

Keywords: low income, health

JEL Classification: I14, I18, J22

Suggested Citation

Du, Juan and Leigh, J. Paul, Effects of Minimum Wages on Absence from Work Due to Illness (November 13, 2017). Available at SSRN: https://ssrn.com/abstract=3071132 or http://dx.doi.org/10.2139/ssrn.3071132

Juan Du

Old Dominion University - Strome College of Business ( email )

Norfolk, VA 23529
United States

J. Paul Leigh (Contact Author)

University of California, Davis - Department of Public Health Sciences ( email )

Davis, CA
United States
530-754-8605 (Phone)
530-752-3239 (Fax)

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