The minimum wage and suicide

One of the more robust findings in the happiness economics literature is the negative impact of unemployment on happiness (as just one example, see this paper). So, to the extent that unhappiness (including depression) is associated with suicide or attempted suicide, we might expect higher unemployment to be associated with more suicide.

There is ongoing debate, and there is no settled consensus, but I believe that the weight of evidence seems to suggest that higher minimum wages do reduce employment (and therefore increase unemployment) - see my most recent post on this topic here. So, to the extent that minimum wages increase unemployment, and unemployment increases unhappiness, then we might expect higher minimum wages to be associated with more suicide.

However, that isn't end of the story. Higher minimum wages are associated with higher incomes (in the simplest sense, among those that receive the minimum wage), and higher incomes might buffer against depression (and suicide). So, there are potential effects in both directions for the relationship between a higher minimum wage and suicide.

A recent article in the Journal of Epidemiology and Community Health (ungated here, and see this New York Times article as well) by John Kaufman (Emory University) and co-authors looked into this relationship using monthly state-level data from the U.S. over the period from 1990-2015. They found that:

When further controlling for state-specific time-varying economic variables, we estimated a 3.5% reduction in the suicide rate for every additional dollar in state minimum wage...

Those results were based on the suicide rate among people without a college education (who might be expected to be more affected by the minimum wage). They found a statistically insignificant effect on suicide among college-educated people. So, it appears that the positive effect of the minimum wage on incomes may outweigh the negative effect of unemployment on suicide.

Kaufman et al. also report that:

We found a statistically significant interaction between minimum wage and unemployment... indicating that the impact of minimum wage varies across the unemployment rate... When unemployment is high (>6.5%), progressively higher minimum wages are associated with lower suicide rates, while at low unemployment (3.8%–6.5%) the effect of minimum wage is attenuated, with little effect observed at very low unemployment (<3.8%). We observed the highest suicide rates when state minimum wage was no higher than the federal and unemployment was high. Curiously, the lowest suicide rates were observed when both minimum wage and unemployment were high (eg, unemployment >7% and minimum wage ≥US$1.75 above the federal).

These results are interesting, but perhaps problematic. Since it appears that unemployment and minimum wage rates are negatively related, it is difficult to disentangle the two effects in this way. So, I would put much more weight on the headline result than on this additional analysis. However, I think more work needs to be done on this research question, as the mechanisms underlying the negative relationship (which has also been found in some other studies) remains under-explained. That might usefully be achieved by looking at individual-level data, rather than aggregate state-level data.

[HT: Marginal Revolution]