State Ninimum Wages and Health Insurance Coverage in the United States: 2008–2018

Document Type

Article

Publication Date

1-1-2021

Department

School of Business

Abstract

This study examines the effect of minimum wage hikes on the shares of uninsured people during the period 2008–2018. Despite some concern that higher minimum wages would lead to higher uninsured rates by (1) reducing employment, (2) inducing employers to stop offering health insurance to their employees, and (3) making minimum wage workers ineligible for Medicaid by increasing their earnings, the findings indicate that the uninsured rate tends to decrease with higher minimum wages, suggesting that minimum wage hikes might encourage minimum-wage workers to obtain health insurance. The effects appear to come from minimum wage hikes that occurred after the Affordable Care Act (ACA) took effect in 2014, suggesting that higher minimum wages combined with federal subsidies for the ACA marketplace and the individual mandate might have contributed to a reduction in the uninsured rate. However, Medicaid expansions seem to mitigate the effect of the minimum wage on the uninsured rate among low-income households.

DOI

10.1007/s10754-021-09313-6

ISSN

21999023

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