The minimum wage, income, and health: evidence from the United States

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Publication Type dissertation
School or College College of Social & Behavioral Science
Department Economics
Author Jalali, Ali
Title The minimum wage, income, and health: evidence from the United States
Date 2019
Description Interest in the noneconomic impact of minimum wage laws have led to a growing literature examining how population health measures respond to state minimum wage increases in the US. These studies rely on the canonical two-way fixed effect estimator, which is an unreliable method to infer causal effects with spatially heterogeneous populations. In this Dissertation, I make three contributions to the minimum wage, income, and health literature. First, I study the impact of minimum wage differences across states and within-state ordinances on infant mortality rates in Chapter 1. I isolate the causal effect of the minimum wage by employing a spatial regression discontinuity design using neighboring counties in different states that are contiguous to a common state border as local treatment and control populations. I find that a 10 % higher cost-of-living adjusted minimum wage is linked with lower infant mortality rates by 3.2%among lower-educated mothers-a group more likely affected by minimum wage changes. I find that reductions in infant mortality is concentrated in the post-neonatal period. I also demonstrate that the traditional empirical approach employed in this literature will produce lower estimates of the health impact of the minimum wage. My findings in Chapter 1 provide robust evidence that higher minimum wages are causally linked with improved infant survival rates. In Chapter 2, I investigate the relationship between the minimum wage and a set of maternal healthcare inputs and measures of adverse health behavior during pregnancy at the county level among lower-educated and mothers without a high school diploma or equivalent. The aim is to discover possible pathways between minimum wage policies and infant health outcomes. Specifically, I study the timing and total number of prenatal visits, the utilization of prenatal care services in general, the average weekly alcohol beverage consumption during pregnancy, and average tobacco use (cigarettes per day) during pregnancy. I find that higher local minimum wage levels as measured by fair-market-rents are associated with improved prenatal healthcare utilization among lower educated mothers. However, no effect was found between the minimum wage and adverse health behavior like tobacco and alcohol use. My empirical strategy followed closely what was learned about credible and efficient empirical strategies of the minimum wage effect on population health variables in Chapter 1. I addressed some empirical shortcoming of Chapter 1 by not just differentiated by education level, but also by age, race, and ethnicity. However, all the effect estimates where found to be quite modest as shown by standardized coefficients. I also argue, by way of elimination, that unobserved psychosocial determinants of health that were not empirically evaluated in Chapter 2 may play a large role in maternal and infant health outcomes. In the final chapter, I provide a more theoretical treatment of the social determinants of health literature by proposing a new choice-theoretic channel mediating the impact of the minimum wage and income policies on population health, with empirical evidence to support the main assumption used in the model. The chapter examines to what extent these socioeconomic factors, specifically income, impact subjective life expectancy (SLE) measured as an individual's belief in surviving to a certain age. I first develop a model to describe how SLE may play an important role in linking wage increases to favorable health behavior by making future time costs of adverse health events binding. The model is based on the familiar Grossman demand for health model. I then estimate a heterogeneous choice proportional odds model, as well as a generalized ordered logistic model to study the income and SLE relationship. The main finding is that income and higher education is positively associated with SLE. I also find that periods of unemployment, disability, divorce, negative life events associated with the great recession were negatively associated with SLE. The chapter contributes to the health disparities literature by providing evidence in support a new channel connecting socioeconomic factors and health outcomes with a theoretical explanation of this channel. The chapter aims to provide additional insight to the relationship between minimum wages and health outcomes.
Type Text
Publisher University of Utah
Dissertation Name Doctor of Philosophy
Language eng
Rights Management (c) Ali Jalali
Format Medium applcation/pdf
ARK ark:/87278/s66q7zcs
Setname ir_etd
ID 1713232
Reference URL