Saturday, 15 February 2025

Minimum wages and health

Picking up again on the theme of last week's posts about recent research on the minimum wage, this 2024 article by David Neumark (University of California-Irvine), published in the journal Labour (open access), reviews the literature on the impacts of minimum wages on health and health behaviours. It's somewhat of a systematic review, although it doesn't closely follow the PRISMA reporting guidelines. Nevertheless, it is a helpful summary of the literature relating minimum wages to health, which is important in light of statements such as this one from the American Public Health Association, claiming unambiguously that higher minimum wages would improve health.

As you might expect the reality is somewhat more nuanced. Neumark starts by pointing out why the effect of higher minimum wages on health is theoretically ambiguous:

The potential for higher minimum wages to improve health is clear, as a higher minimum wage unambiguously raises incomes for some workers (and their families). On the other hand, job loss can reduce income among other workers and their families... it is entirely possible that health benefits from income gains for some workers outweigh adverse health effects for others who lose their jobs, perhaps because there are almost certainly more income gainers than job losers. This net gain might be more likely if there was clear evidence that minimum wages raise incomes in lower income families (rather than for low-wage workers). However, the evidence on family income is ambiguous, in part because many minimum wage workers are not in poor or low-income families, and many low-income families have no workers...

That latter point relates to my most recent post on the effect of minimum wages on poverty, covering research by Burkhauser et al. that demonstrated (as has been shown before) that only a minority of minimum wage workers live in poor families. Neumark's review covers 63 published and peer-reviewed articles, mostly using US data, and mostly published in the last decade. He separated his review into sections on adult and teen health, infant and child health, diet and obesity, mental health, suicide, family structure and children, risky behaviour, crime (which seems a little out of place, but many studies that consider risky behaviour also consider crime), and mechanisms that can affect health (like access to health insurance). Neumark briefly summarises each paper, notes some of the positives and negatives of the methods employed, and draws a conclusion about how convincing (or otherwise) each study is (generally on the basis of the methods employed).

There is a lot to unpack in the review, and I'm not going to try to summarise it all here. Instead, here's what Neumark says in the concluding section:

...the evidence, even focusing on the more-compelling studies (which I do), is decidedly mixed. The evidence on overall physical health points in conflicting directions, and may lean toward adverse effects—possibly a reflection, in part, of the conflicting influences of minimum wages on factors that can affect health (related to how higher income is spent). In particular, research on the effects of minimum wages on diet and obesity sometimes points to beneficial effects, whereas other evidence indicates that higher minimum wages increase smoking and drinking and reduce exercise (and possibly hygiene). In contrast, there is rather strong evidence that higher minimum wages reduce suicides, perhaps partly consistent with the evidence on effects on other measures of mental health/depression being either positive or mixed.

Going a little farther afield, research on minimum wage effects on family structure and children indicates that mothers spend more time with children, provides no clear indication of changes in treatment of children, but point to declines in children's test scores—clearly a mixed picture. There are many good studies of the effects of minimum wages on crime, but the conclusions are mixed. Turning to channels of influence on health (most notably, health insurance), the stronger evidence points to declines in employer-provided health insurance, and other adverse effects on potential influences on health, but there is no clear evidence of effects on unmet medical needs.

When Neumark narrows his focus only to those studies where the evidence is most convincing, he concludes that:

...the mixed conclusions on how minimum wages affect health and related behaviors undermine the evidence base for concluding that the minimum wage is an effective means of improving health.

However, one thing that this review highlights is the comparative lack of research on the effect of minimum wages on health, particularly in comparison to, say, studies on the effect of minimum wages on labour market outcomes (of which there are many). It also highlights that few studies, even relatively recent studies, perform even basic supplementary analysis such as placebo checks on the effects of minimum wages on groups unlikely to be affected by higher minimum wages (such as those with high education), and many studies over-control by including unemployment, income, or poverty in their analyses. Clearly, there is substantial scope for additional research in this space. Indeed, in a footnote to the paper, Neumark notes that:

Effects of minimum wages on drug use, perhaps particularly opioids, could impact health and suicides (as well as other outcomes). This would be a natural question to consider. However, I have not found any such evidence.

So, not only is there scope to improve on the extant studies, there is also scope for studies on areas of health that have not been considered to date. Clearly, there will be more research to come on this theme.

Read more:

Posted by at
Labels: , , , , ,

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)