Income assistance programs and population health : the dual impact of minimum wages and the earned income tax credit

Lenhart, Otto and Chakraborty, Kalyan (2024) Income assistance programs and population health : the dual impact of minimum wages and the earned income tax credit. Economics Letters, 234. 111508. ISSN 0165-1765 (https://doi.org/10.1016/j.econlet.2023.111508)

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Abstract

In this study, we provide new evidence on the interaction of state-level minimum wages and Earned Income Tax Credit (EITC) laws on several measures of population health. Using data from the National Vital Statistics Reports between 1999 and 2018, we estimate difference-in-differences models to evaluate the dual impact of minimum wages and the EITC on various causes of mortality, such as suicides, motor accidents and assaults. While several researchers have examined the health effects of both these policies separately, few studies have examined the potential interaction effects of these policies. Specifically, while previous work has provided evidence that both minimum wages and the EITC can reduce suicide rates, our study contributes to the literature by showing that the policies have a positive dual impact on population health. We find that a $1 increase in minimum wages reduces death rates due to suicides and assaults by 3.8 percent and 15.2 percent in states with EITC laws, respectively. In contrast, we show that minimum wages do not impact these outcomes in states without state-level EITC laws.

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