Invited Commentary: Methods for Estimating Effects of Minimum Wages on Health

Abstract

Economists have been researching effects of minimum wages on unemployment, poverty, income inequality, and educational attainment for over 60 years. Epidemiologists have only recently begun researching minimum wages even though unemployment through education are central topics within social epidemiology. Buszkiewicz et al. (Am J Epidemiol. 2021;190(1):21-30) offer a welcome addition to this nascent literature. A commanding advantage of Buszkiewicz et al.'s study over others is its distinction between a "likely affected" group comprised of workers with ≤12 years of schooling versus "not likely affected" groups with ≥13 years of schooling. But there are disadvantages, common to other studies. Buszkiewicz et al. use cross-sectional data; they include the self-employed as well as part-time and part-year workers in their treatment groups. Their definitions of affected groups based on education create samples with 75% or more of workers who earn significantly above minimum wages; definitions are not based on wages. Inclusion of workers not subject to (e.g., self-employed) or affected by minimum wages biases estimates toward the null. Finally, within any minimum wage data set, it is the state-not federal-increases that account for the lion's share of increases and that form the natural experiments; however, state increases can occur annually whereas the development of chronic diseases might take decades.

Keywords: difference-in-differences; labor economics; minimum wage; social epidemiology.