Minimum Wages and the Health of Immigrants’ Children

Introduction

Nearly 1 in 4 children in the U.S are in immigrant families. These children, many of whom are U.S. citizens, are disproportionately represented among the poor and uninsured. In this paper, we use a difference-in-differences identification strategy and data from the National Health Interview Survey (NHIS) from the years 2000-2015 to examine the effects of minimum wage increases on health, access to health care and use of preventive care for the children of low-educated immigrants.

Minimum wage increases could affect the health of immigrant children because many immigrant parents have low education levels and limited English proficiency, and previous research has shown that immigrant children’s health has improved with access to other policies that increase income.

Data

We combine individual level data from the NHIS with state-level data on labor force characteristics and other state-level policies to estimate equation (1):

(1) y_ist = α + ϒ₁ MW_st + ϒ₂ Z_it + ϒ₃ X_st + ϴ_s + τ_t + ε_ist

where y_ist is our dependent variable for individual i, residing in state s at year t; MW_st is the minimum wage; Z_it is a vector of individual controls; X_st is a vector of state-specific time-varying economic and policy controls that may be correlated with minimum wages and health. ϴ_s is the state effect; τ_t is the year effect, and ε_ist is an error term. In some alternative specifications, we include state-specific time trends. The NHIS is the principal source of information on the health of the civilian non-institutionalized population of the US.

We will also employ a triple difference identification strategy, where we compare the effects of minimum wage increases on our health outcomes between low-educated natives (US-born) and different groups of low-educated immigrants using equation (1):

(2) y_ist = α + ϒ₁ MW_st + ϒ₂ Z_it + ϒ₃ X_st + ϒ₄ MW_st * Immigrant_it + ϴ_s + τ_t + ε_ist

where all the notation is the same as that in equation (1), with the new variable Immigrant_it indicating which immigrant subgroup the children’s parents belong to. The key coefficient of interest is ϒ₄. All regressions are weighted and estimated using Stata’s svy module, which accounts for the complex design of the NHIS.

Equations (1) and (2) identify the effect of minimum wages on health using within-state variation of minimum wages. We examine a wide array of health outcomes including self-rated physical health and mental health, insurance status and a number of health issues including headaches, stomach problems, and asthma.

Mechanism

One primary mechanism through which minimum wages may influence health insurance status, health status, and preventive care would be through an income effect. However, the relationship between income and health can be complex. With higher wages, the price of time-intensive health-promoting activities increases (e.g. exercise, preparation of healthy meals) thus it is possible that a wage increase could lead to worse health. Low income individuals who receive higher wages may also lose their Medicaid eligibility.

Preliminary Results

We are currently working at the RDC in Madison, Wisconsin with the data and have begun obtaining results.