Researchers have found that when the minimum wage in a state increased, or when states boosted a tax credit for working families, the suicide rate decreased.
Raising the minimum wage and the earned-income tax credit (EITC) by 10 percent each could prevent about 1,230 suicides annually, according to a working paper circulated by the National Bureau of Economic Research this week.
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The EITC was designed to boost the wages of low-income workers, particularly families with children. Many states have supplemented or expanded the credit.
Raising the minimum wage and increasing the tax credit help less-educated, low-wage workers who have been hit hardest by what are now known as “deaths of despair,” according to the analysis of 1999-2015 death data from the Centers for Disease Control and Prevention by University of California at Berkeley economists Anna Godoey and Michael Reich, as well as public-health specialists William Dow and Christopher Lowenstein.
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Deaths of despair, a phrase popularized by Princeton economists Anne Case and Angus Deaton in a pair of widely cited 2015 and 2017 papers, typically refers to rising death rates among middle-aged white non-Hispanic Americans.
In 2017, Case and Deaton wrote that those rising death rates can be attributed to “drug overdoses, suicides, and alcohol-related liver mortality — particularly among those with a high school degree or less.”
To evaluate how policy choices could affect those deaths, the Berkeley team identified states that had raised their minimum wage or EITC between 1999 and 2015. They also included states whose wages were affected by federal minimum-wage increases. The researchers then measured the change in the rate for such deaths before and after the policies took effect.
To control for national trends, they compared the changes with states that hadn’t changed their minimum wage or EITC.
The researchers looked at suicides and drug overdoses. Unlike degenerative liver disease linked to alcohol abuse, those events can be connected to a single point in time.
The team found little change in drug overdoses, whether intentional or accidental, after the new policies took effect. This falls in line with the growing consensus that, unlike other deaths of despair, drug overdoses probably are linked to increased availability of addictive (and lethal) drugs.
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But the number of suicides that weren’t related to drugs dropped noticeably. Among adults without a college education, increasing the EITC by 10 percent appears to have decreased non-drug suicides by about 5.5 percent. Raising the minimum wage by 10 percent reduced suicides by 3.6 percent.
“When they implement these policies, suicides fall very quickly,” Godoey said in an interview.
Although raising the minimum wage led to an immediate decrease in suicides, raising the EITC had a delayed effect, resulting in fewer suicides the following year, once the tax change came into force. In both cases, it appears as though taking home more money had a positive effect.
The effect was strongest among young women and others who were most likely to have minimum-wage jobs. Among men, black and Hispanic Americans saw the largest effect.
A March study in the American Journal of Preventive Medicine also found that a one-dollar increase in the minimum wage was associated with a 1.9 percent decrease in suicides, and that the association was strongest between 2011 and 2016, the most recent year studied.
Leading minimum-wage scholar Arindrajit Dube of the University of Massachusetts at Amherst, who shows in a forthcoming publication in the American Economic Journal: Applied Economics that higher minimum wages increase incomes for the poorest families, said the two studies provide “important additional evidence on the possible impact of a higher minimum wage on the standard of living — or living at all.”
The scholars are contributing to a larger body of work that links health, particularly mental health, with economic policy and outcomes.
In a 2014 analysis in American Economic Journal: Economic Policy, William Evans of the University of Notre Dame and Craig Garthwaite of Northwestern’s Kellogg School of Management found that mothers who received a higher EITC reported better mental and physical health.
In a paper to be published in American Economic Review: Insights, David Autor of the Massachusetts Institute of Technology, David Dorn of the University of Zurich and Gordon Hanson of the University of California at San Diego drew on data from between 1990 and 2014 to find that the death rate among men tended to rise in cities where jobs were vanishing because of competition from cheap foreign goods.