Minimum Wages and Immigrant Health

Immigrants are a vulnerable population due to their high risk for poor physical, psychological, and social health outcomes (Derose et al., 2007). Compared to similarly poor native-born citizens, low-income immigrants are more likely to lack health insurance. A sizeable segment of the immigrant population in the U.S. work at minimum wage jobs because they have lower educational attainment, limited language skills, and less social capital. Given the size and the rapid growth of immigrants in the U.S. workforce, it is important to examine the impact of minimum wage increases on immigrants’ health and access to care.

Conventional economic theory predicts that increases in minimum wages raise hourly earnings and reduce employment. Orrenius and Zavodny (2008) find that hourly earnings for low-skilled adult immigrants increased with minimum wage increases but they find no adverse employment effects.

Increases in earnings resulting from higher minimum wages create an income effect (among those who keep their jobs) which could then improve health outcomes. The potential for better health has led some policymakers to call for higher minimum wages specifically to improve health (e.g. Bhatia, 2014). Empirically, there is a growing literature aimed at determining if minimum wage increases positively affect the health of those individuals who retain their jobs and have higher earnings (e.g., Averett et al. 2016, Kronenberg et al. 2015, Lenhart 2015, Reeves et al. 2014, 2016, Strain et al. 2016, and Wehby et al. 2016).

This paper examines whether minimum wage increases affect the health of low-skilled immigrants. We do so by using data from the National Health Interview Survey and estimating the following equation:

y_ist=α+δ₁MW_st+ δ₂Z_it+ δ₃X_st+θ_s+τ_t+ε_ist

where y_ist is our health outcome for individual i, residing in state s at year t; MW_st is the minimum wage (or the ratio of the minimum wage to the state’s average wage); Z_it is a vector of individual controls including age, marital status, language of interview, race/ethnicity, citizenship status, years in the U.S. X_st is a vector of state-specific time-varying economic and policy controls that may be correlated with minimum wages and health including immigrant’s access to health care, welfare and food benefits after the 1996 welfare reform act, the percent of the state’s workforce covered by a collective bargaining agreement, the percent of union membership, the state unemployment rate, state cigarette taxes, the percent of the state’s population below the poverty line, whether the state has an e-verify mandate and whether the state allows for public health insurance for unauthorized children and adults. θ_s is the time-invariant state effect; τ_t is the time-invariant year effect, and ε_ist is an error term. Standard errors will be clustered by state.

Preliminary results using the Current Population Survey which has a much more limited set of health outcomes shows that there is likely to be an income effect and an effect of minimum wages on self-rated health for working immigrants. Using the NHIS data we will be able to test a variety of health and health related outcomes.