Do minimum wage increases benefit worker health? Evidence from China
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Do minimum wage increases benefit worker health? Evidence from China Jiwei Chen1
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Received: 29 November 2019 / Accepted: 14 August 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract This paper investigates whether minimum wage increases affect worker health in China. Using data on low-skilled workers from the 2014 and 2016 China Labor-force Dynamic Survey (CLDS), I find minimum wage increases significantly improve several measures of health, including self-reported health status and the presence of health conditions. When examining the potential channels underlying the relationship between minimum wages and health, I find the health behaviors (smoking, drinking, and regular exercise) of low-skilled workers do not change significantly after minimum wage increases. Minimum wage increases significantly improve the living standards and job satisfaction of low-skilled workers. Finally, I find minimum wage increases play a larger role in improving the health of rural hukou workers and workers aged 35 and above. Keywords Minimum wage Health Low-skilled workers China ●
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JEL I1 I10 I18 ●
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1 Introduction Many studies have examined the relationship between income and health, and found that low-income families suffer from worse health outcomes than wealthier families (Adda et al. 2009; Banerjee et al. 2010; Fichera and Savage, 2015; Schwandt, 2018). Previous research has confirmed that government assistance programs for vulnerable groups can provide health benefits (Figlio et al. 2009; Milligan, 2011; Hoynes et al. 2015). As an important policy tool to help low-income workers, does minimum wage policy have an effect on worker health? Many researchers have studied the relationship between minimum wage policy and employment (Card and Krueger, 1994;
* Jiwei Chen [email protected] 1
College of Economics, Jinan University, 601 West Huangpu Road, Guangzhou, China
J. Chen
Neumark and Wascher, 2007; Meer and West, 2016), poverty (Neumark and Wascher, 2002; MaCurdy, 2015), and other labor market outcomes (Neumark et al. 2004; Bosch and Manacorda, 2010; David et al. 2016). However, only a relatively small number of studies have investigated the effects of minimum wage policy on health-related outcomes in developed countries (Adams et al. 2012; Kronenberg et al. 2017; Wehby et al. 2020; Lenhart, 2017a; Horn et al. 2017; Clark et al. 2019). It was not until 1993 that the first regulation on minimum wage in China was issued by the Ministry of Labour and Social Security. However, compared with developed countries such as the U.S. and UK, minimum wage in China has its own particular characteristics. It is frequently adjusted with reference to multiple economic indicators, which enhances the adaptability to economic development of various regions, showing good provincial and city differences (including about 100 separate minimum wages each year), providing an advantage for data analysis. Moreover, unlike developed countries, minimum wages in developing countries have non-compliance p
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