Minimum Wages and Public Health: A Literature Review

Abstract

We evaluate evidence for the effectiveness of raising minimum wages on various measures of public health within the US, Canada, the UK, and Europe. We search four scientific websites from the inception of the research through May 20, 2018. We find great variety (20 ) in measured outcomes among the 33 studies that pass our initial screening. We establish quality standards in a second screening resulting in 15 studies in which we create outcome-based groups. Outcomes include four broad measures (general overall health, behavior, mental health, and birth weight) and eight narrow measures (self-reported health, “bad” health days, unmet medical need, smoking, problem-drinking, obesity, eating vegetables, and exercise). We establish criteria for “stronger” findings for outcomes and methods. Stronger findings include: $1 increases in minimum wages are associated with 1.4 percentage point (4% evaluated at mean) decreases in smoking prevalence; failure to reject null hypotheses that minimum wages have no effects for most outcomes; and no consistent evidence that minimum wages harm health. One “suggestive” finding is that the best-designed studies have well-defined treatment (or likely affected) and control (unaffected) groups and contain longitudinal data. The major methodological weaknesses afflicting many studies are the lack of focus on persons likely affected by minimum wages and omission of “falsification tests” on persons likely unaffected. An additional weakness is lack of attention to how findings might differ across populations such as teenagers, adults, men, women, continuously employed and unemployed persons. Research into health effects of minimum wages is in its infancy and growing rapidly. We present a list of “better practices” for future research.

Keywords: low income, social determinants of health

JEL Classification: I1, J3