The Short and Medium Term Well-Being Effects of the Minimum Wage

39 Pages Posted: 10 Oct 2019

See all articles by Moiz Bhai

Moiz Bhai

University of Arkansas at Little Rock - Department of Economics

Date Written: May 14, 2019

Abstract

The psychic effects of the minimum wage are unknown. I estimate traditional and contiguous counties difference-in-difference models to measure the well-being effects of the minimum wage. In the short-term, I observe that a one-dollar minimum wage increase produces a robust transitory well-being loss of approximately .006 percentage points for young individuals. In the medium-term, I find some evidence of positive well-being gains of .006 to .015 standard deviations for all adults, but these estimates are sensitive to the research design. These findings provide an additional approach to evaluate the welfare effects of the minimum wage.

Keywords: Minimum Wage, Subjective Well-being, Life Satisfaction, Happiness Economics, Psychic Costs

JEL Classification: I31, J23, J68

Suggested Citation

Bhai, Moiz, The Short and Medium Term Well-Being Effects of the Minimum Wage (May 14, 2019). Available at SSRN: https://ssrn.com/abstract=3388353 or http://dx.doi.org/10.2139/ssrn.3388353

Moiz Bhai (Contact Author)

University of Arkansas at Little Rock - Department of Economics ( email )

Little Rock, AR 72205
United States

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