IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v26y2017i5p639-655.html
   My bibliography  Save this article

Introduction of a National Minimum Wage Reduced Depressive Symptoms in Low‐Wage Workers: A Quasi‐Natural Experiment in the UK

Author

Listed:
  • Aaron Reeves
  • Martin McKee
  • Johan Mackenbach
  • Margaret Whitehead
  • David Stuckler

Abstract

Does increasing incomes improve health? In 1999, the UK government implemented minimum wage legislation, increasing hourly wages to at least £3.60. This policy experiment created intervention and control groups that can be used to assess the effects of increasing wages on health. Longitudinal data were taken from the British Household Panel Survey. We compared the health effects of higher wages on recipients of the minimum wage with otherwise similar persons who were likely unaffected because (1) their wages were between 100 and 110% of the eligibility threshold or (2) their firms did not increase wages to meet the threshold. We assessed the probability of mental ill health using the 12‐item General Health Questionnaire. We also assessed changes in smoking, blood pressure, as well as hearing ability (control condition). The intervention group, whose wages rose above the minimum wage, experienced lower probability of mental ill health compared with both control group 1 and control group 2. This improvement represents 0.37 of a standard deviation, comparable with the effect of antidepressants (0.39 of a standard deviation) on depressive symptoms. The intervention group experienced no change in blood pressure, hearing ability, or smoking. Increasing wages significantly improves mental health by reducing financial strain in low‐wage workers. © 2016 The Authors. Health Economics published by John Wiley & Sons Ltd.

Suggested Citation

  • Aaron Reeves & Martin McKee & Johan Mackenbach & Margaret Whitehead & David Stuckler, 2017. "Introduction of a National Minimum Wage Reduced Depressive Symptoms in Low‐Wage Workers: A Quasi‐Natural Experiment in the UK," Health Economics, John Wiley & Sons, Ltd., vol. 26(5), pages 639-655, May.
    • Handle: RePEc:wly:hlthec:v:26:y:2017:i:5:p:639-655
    DOI: 10.1002/hec.3336
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.3336
    Download Restriction: no
    File URL: https://libkey.io/10.1002/hec.3336?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Angus Deaton, 2003. "Health, Inequality, and Economic Development," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 113-158, March.
    2. Mark B. Stewart, 2012. "Wage inequality, minimum wage effects, and spillovers," Oxford Economic Papers, Oxford University Press, vol. 64(4), pages 616-634, October.
    3. James J. Heckman, 2008. "Econometric Causality," International Statistical Review, International Statistical Institute, vol. 76(1), pages 1-27, April.
    4. Frijters, Paul & Ulker, Aydogan, 2008. "Robustness in health research: Do differences in health measures, techniques, and time frame matter?," Journal of Health Economics, Elsevier, vol. 27(6), pages 1626-1644, December.
    5. Mark B. Stewart, 2004. "The employment effects of the national minimum wage," Economic Journal, Royal Economic Society, vol. 114(494), pages 110-116, March.
    6. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    7. Mark B. Stewart, 2004. "The Impact of the Introduction of the U.K. Minimum Wage on the Employment Probabilities of Low-Wage Workers," Journal of the European Economic Association, MIT Press, vol. 2(1), pages 67-97, March.
    8. Blanchflower, David G. & Oswald, Andrew J., 2008. "Hypertension and happiness across nations," Journal of Health Economics, Elsevier, vol. 27(2), pages 218-233, March.
    9. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    10. Benedicte Apouey & Andrew E. Clark, 2015. "Winning Big but Feeling no Better? The Effect of Lottery Prizes on Physical and Mental Health," Health Economics, John Wiley & Sons, Ltd., vol. 24(5), pages 516-538, May.
    11. Dunning,Thad, 2012. "Natural Experiments in the Social Sciences," Cambridge Books, Cambridge University Press, number 9781107017665, November.
    12. Benzeval, Michaela & Judge, Ken, 2001. "Income and health: the time dimension," Social Science & Medicine, Elsevier, vol. 52(9), pages 1371-1390, May.
    13. Marcello Bertotti & Paul Watts & Gopalakrishnan Netuveli & Ge Yu & Elena Schmidt & Patrick Tobi & Shahana Lais & Adrian Renton, 2013. "Types of Social Capital and Mental Disorder in Deprived Urban Areas: A Multilevel Study of 40 Disadvantaged London Neighbourhoods," PLOS ONE, Public Library of Science, vol. 8(12), pages 1-1, December.
    14. Neumark, David & Wascher, William, 2001. "Using the EITC to Help Poor Families: New Evidence and a Comparison With the Minimum Wage," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(2), pages 281-318, June.
    15. Taylor, Mark P. & Jenkins, Stephen P. & Sacker, Amanda, 2011. "Financial capability and psychological health," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 710-723.
    16. repec:hal:pseose:halshs-01155641 is not listed on IDEAS
    17. James J. Heckman, 2008. "Causalidad econométrica," Monetaria, CEMLA, vol. 0(3), pages 291-338, julio-sep.
    18. Noah Uhrig, S.C., 2008. "The nature and causes of attrition in the British Household Panel Study," ISER Working Paper Series 2008-05, Institute for Social and Economic Research.
    19. Jenkins, Stephen P., 2010. "The British Household Panel Survey and its Income Data," IZA Discussion Papers 5242, Institute of Labor Economics (IZA).
    20. Leigh, Andrew, 2007. "Earned Income Tax Credits and Labor Supply: New Evidence From a British Natural Experiment," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(2), pages 205-224, June.
    21. Arnaud Chevalier & Reamonn Lydon, 2002. "Estimates of the Effect of Wages on Job Satisfaction," CEP Discussion Papers dp0531, Centre for Economic Performance, LSE.
    22. Hilary Hoynes & Doug Miller & David Simon, 2015. "Income, the Earned Income Tax Credit, and Infant Health," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 172-211, February.
    23. Sacker, A. & Wiggins, R.D. & Bartley, M. & McDonough, P., 2007. "Self-rated health trajectories in the United States and the United Kingdom: A comparative study," American Journal of Public Health, American Public Health Association, vol. 97(5), pages 812-818.
    24. Richard Dickens & Alan Manning, 2004. "Has the national minimum wage reduced UK wage inequality?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 167(4), pages 613-626, November.
    25. Chaloupka, Frank J. & Warner, Kenneth E., 2000. "The economics of smoking," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 29, pages 1539-1627, Elsevier.
    26. Sekhon, Jasjeet S. & Titiunik, Rocío, 2012. "When Natural Experiments Are Neither Natural nor Experiments," American Political Science Review, Cambridge University Press, vol. 106(1), pages 35-57, February.
    27. Robinson, Gregory & McNulty, John E. & Krasno, Jonathan S., 2009. "Observing the Counterfactual? The Search for Political Experiments in Nature," Political Analysis, Cambridge University Press, vol. 17(4), pages 341-357.
    28. Jones, Andrew M. & Wildman, John, 2008. "Health, income and relative deprivation: Evidence from the BHPS," Journal of Health Economics, Elsevier, vol. 27(2), pages 308-324, March.
    29. Robert T. Jensen & Nolan H. Miller, 2008. "Giffen Behavior and Subsistence Consumption," American Economic Review, American Economic Association, vol. 98(4), pages 1553-1577, September.
    30. Gunasekara, Fiona Imlach & Carter, Kristie & Blakely, Tony, 2011. "Change in income and change in self-rated health: Systematic review of studies using repeated measures to control for confounding bias," Social Science & Medicine, Elsevier, vol. 72(2), pages 193-201, January.
    31. David Neumark & DMark Schweitzer & DaWilliam Wascher, 2004. "Minimum Wage Effects throughout the Wage Distribution," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    32. Mark B. Stewart & Joanna K. Swaffield, 2002. "Using the BHPS Wave 9 Additional Questions to Evaluate the Impact of the National Minimum Wage," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(supplemen), pages 633-652, December.
    33. Dunning,Thad, 2012. "Natural Experiments in the Social Sciences," Cambridge Books, Cambridge University Press, number 9781107698000, November.
    34. Susan Averett & Yang Wang, 2013. "The Effects Of Earned Income Tax Credit Payment Expansion On Maternal Smoking," Health Economics, John Wiley & Sons, Ltd., vol. 22(11), pages 1344-1359, November.
    35. McCarrier, K.P. & Zimmerman, F.J. & Ralston, J.D. & Martin, D.P., 2011. "Associations between minimum wage policy and access to health care: Evidence from the behavioral risk factor surveillance system, 1996-2007," American Journal of Public Health, American Public Health Association, vol. 101(2), pages 359-367.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Reeves, Aaron & McKee, Martin & Mackenbach, Johan & Whitehead, Margaret & Stuckler, David, 2017. "Introduction of a national minimum wage reduceddepressive symptoms in low-wage workers:a quasi-natural experiment in the UK," LSE Research Online Documents on Economics 66485, London School of Economics and Political Science, LSE Library.
    2. Maite Blázquez Cuesta & Santiago Budría, 2013. "Does income deprivation affect people’s mental well-being?," Working Papers 1312, Banco de España.
    3. Gunasekara, Fiona Imlach & Carter, Kristie & Blakely, Tony, 2011. "Change in income and change in self-rated health: Systematic review of studies using repeated measures to control for confounding bias," Social Science & Medicine, Elsevier, vol. 72(2), pages 193-201, January.
    4. Otto Lenhart, 2019. "The effects of income on health: new evidence from the Earned Income Tax Credit," Review of Economics of the Household, Springer, vol. 17(2), pages 377-410, June.
    5. Au, N. & Johnston, D. W., 2013. "An econometric analysis of self-assessed health: what does it mean and what is it hiding?," Health, Econometrics and Data Group (HEDG) Working Papers 13/31, HEDG, c/o Department of Economics, University of York.
    6. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    7. Cuesta, Maite Blázquez & Budría, Santiago, 2015. "Income deprivation and mental well-being: The role of non-cognitive skills," Economics & Human Biology, Elsevier, vol. 17(C), pages 16-28.
    8. Mark B. Stewart & Joanna K. Swaffield, 2008. "The Other Margin: Do Minimum Wages Cause Working Hours Adjustments for Low‐Wage Workers?," Economica, London School of Economics and Political Science, vol. 75(297), pages 148-167, February.
    9. William N. Evans & Craig L. Garthwaite, 2014. "Giving Mom a Break: The Impact of Higher EITC Payments on Maternal Health," American Economic Journal: Economic Policy, American Economic Association, vol. 6(2), pages 258-290, May.
    10. Otto Lenhart, 2021. "Earned income tax credit and crime," Contemporary Economic Policy, Western Economic Association International, vol. 39(3), pages 589-607, July.
    11. Maite Blázquez Cuesta & Elena Cottini & Herrarte, A. (Ainhoa), 2012. "GINI DP 39: Socioeconomic Gradient in Health: How Important is Material Deprivation?," GINI Discussion Papers 39, AIAS, Amsterdam Institute for Advanced Labour Studies.
    12. Joanna K. Swaffield, 2014. "Minimum Wage Hikes And The Wage Growth Of Low-Wage Workers," Bulletin of Economic Research, Wiley Blackwell, vol. 66(4), pages 384-405, October.
    13. Peng Nie & Qing Li & Alan A. Cohen & Alfonso Sousa-Poza, 2021. "In search of China’s income-health gradient: a biomarker-based analysis," Applied Economics, Taylor & Francis Journals, vol. 53(48), pages 5599-5618, October.
    14. Oscar Erixson, 2017. "Health responses to a wealth shock: evidence from a Swedish tax reform," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(4), pages 1281-1336, October.
    15. Kronenberg, C. & Jacobs, R. & Zucchelli, E., 2015. "The impact of a wage increase on mental health: Evidence from the UK minimum wage," Health, Econometrics and Data Group (HEDG) Working Papers 15/08, HEDG, c/o Department of Economics, University of York.
    16. Fiona Imlach Gunasekara & Kristie Carter & Peter Crampton & Tony Blakely, 2013. "Income and individual deprivation as predictors of health over time," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 58(4), pages 501-511, August.
    17. George L. Wehby & Dhaval M. Dave & Robert Kaestner, 2020. "Effects of the Minimum Wage on Infant Health," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 411-443, March.
    18. Maite Blázquez & Elena Cottini & Ainhoa Herrarte, 2014. "The socioeconomic gradient in health: how important is material deprivation?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(2), pages 239-264, June.
    19. Au, Nicole & Johnston, David W., 2014. "Self-assessed health: What does it mean and what does it hide?," Social Science & Medicine, Elsevier, vol. 121(C), pages 21-28.
    20. Cheng, Lingguo & Liu, Hong & Zhang, Ye & Zhao, Zhong, 2018. "The health implications of social pensions: Evidence from China's new rural pension scheme," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 53-77.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:26:y:2017:i:5:p:639-655. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.