Panel Paper: Urban Economic Policy As Health Policy: Quasi-Experimental Evidence from US Metropolitan Living Wage Ordinances

Thursday, July 19, 2018
Building 5, Sala Maestros Upper (ITAM)

*Names in bold indicate Presenter

Mustafa Hussein1, D. Phuong Do1 and Scott Adams2, (1)University of Wisconsin, Milwaukee, (2)University of Wisconsin-Milwaukee

Metropolitan living wage (LW) policies, enacted by many US cities in the 1990s and 2000s, intended to lift working families out of poverty by mandating substantial, sustained increases in minimum wage, along with other social protections. Despite covering a small percentage of low-wage workers, evidence suggests these LW policies resulted in sizable declines in urban poverty with only modest disemployment. Whether these effects translated into health improvements remains largely unknown. We leverage a natural experiment in LW policy adoption across US metropolitan areas, with relevant variations in policy design and implementation, to provide actionable evidence on the value of LW policies for the health and wellbeing of working families. In the 1996-2004 repeated cross-sections of the Community Tracking Study (46 metropolitan sites; n=126,863), we estimate LW policy effects on health outcomes (poor self-rated health, feeling depressed, frequently smoking, and having unmet healthcare needs) using a difference-in-differences-in-differences design, exploiting outcome variation across time, treated/control sites, and groups defined by skill (education) and pre-LW poverty levels. We found large (>30%), sustained (over 5-6 years) declines in poor health and depressive symptoms, and improvements in covering basic healthcare needs (over 1-3 years) particularly among near-poor, low-skilled (≤high school) workers. However, among poor, low-skilled workers, smoking rates seem to have increased steadily over time. These findings were robust to multiple alternative specifications, and were even larger when policies were expansively implemented and had broader worker coverage. These findings underscore the role urban economic policy could play as a modifiable determinant of population health.