The Effect of Living-Cost Adjusted Minimum Wage on Low Birth Weights: A County-Level Analysis

I investigate the relationship between the minimum wage and the share of low birth weights at the county level. Even if the minimum wage reduces employment and hours worked, it may introduce other benefits, and a welfare analysis that focuses only on these two factors is incomplete. My research contributes to the growing body of literature addressing the public health effects of the minimum wage; low birth weights are particularly important public health issue because people with low birth weights have lower educational attainment, earnings and self-reported physical health as adults. To conduct this study, I create a novel dataset by tabulating local, state, and federal minimum wages and deflating them by a measure of local living costs. Then I use a difference-in-difference framework to test whether changes in the minimum wage have a casual effect on the share of low birth weights, ultimately finding no effect. I do, however, find evidence that hikes in the minimum wage tend to happen at the same time as increases in per capita public health spending, suggesting a possible mechanism and indicating that the minimum wage may not be exogenous to public health outcomes