Association for Public Policy Analysis & Management

Midlife mortality has risen steadily in the U.S. since the 1990s for non-Hispanic whites without a bachelor’s degree, and since 2013 for Hispanics and African-Americans who lack a bachelor’s degree. These increases largely reflect increased mortality from alcohol poisoning, drug overdose and suicide. Researchers differ on the role of economic conditions and other factors, such as availability of low-cost opioids, in these higher mortality rates. We investigate whether these “deaths of despair” respond to two key policies aimed at raising incomes for low wage workers: the minimum wage and the Earned Income Tax Credit (EITC). Both policies have been linked to improved physical and mental health outcomes. Ours is the first causal study of their effects on premature mortality.

Our analysis focuses on three causes of death: intentional drug overdoses, unintentional drug overdoses and non-drug suicides. The primary data source is the restricted access geocoded CDC Multiple Causes of Death data for the years 1999-2015. Using this data, we leverage state variation in minimum wage levels and EITC policies over time to estimate difference-in-differences models of drug overdose deaths and suicides. To ensure causal identification, the parallel trends assumption must hold; that is, changes in state minimum wages should be uncorrelated with unobserved drivers of earnings and employment. This assumption is potentially problematic as minimum wage policies and EITCs are not randomly assigned. For example, states with high minimum wages are geographically clustered, more likely to vote Democratic, and more unionized.

We implement a dual approach to testing whether the parallel trends assumption is likely to hold. First, we estimate effects on cause-specific mortality of college graduates. As college graduates are not likely to be exposed to minimum wage jobs, any effect on this group is likely spurious, reflecting divergent trends between high and low minimum wage states. Second, we estimate event-studies that model the time path of effects around the time of minimum wage increases. The intuition here is that minimum wage increases should not affect mortality in the years leading up to the policy change.

While our models find no significant associations between the minimum wage and drug-related mortality, non-drug suicides decline significantly with higher minimum wages and EITCs. A 10 percent increase in the minimum wage reduces non-drug suicides among adults with high school education or less by 3.6 percent; 10 percent in the EITC reduces suicides among this group by 5.5 percent. We do not find significant effects for a college-educated placebo sample. Event-study models confirm parallel pre-trends, further supporting our empirical approach. Our estimates suggest that increasing both the minimum wage and the EITC by 10 percent would likely prevent a combined total of around 1,230 suicides each year.

Our results are consistent with other studies that find the opioid crisis primarily reflects drug supply, rather than economic factors. Non-drug suicides, however, do respond to higher minimum wages and EITCs. These policies thus have significant positive downstream effects beyond pay and employment.