The effect of age-dependent minimum wage on health: evidence from the UK
When:
—
Venue:
Online
We are pleased to announce the 2nd Seminar Series on Governance, Institutions, and Sustainability jointly hosted by the Centre for Political Economy and Institutional Studies and by the Birkbeck Responsible Business Centre, within the Birkbeck Business School.
In our rapidly evolving world, the intricate web connecting governance, institutions, and sustainability has become increasingly prominent. We invite scholars, researchers, and practitioners to enhance this very important debate and to join us in exploring the profound intertwining of these critical elements at our upcoming seminar series.
Abstract
In our study we examine the impact of age-based minimum wages on the health outcomes of young workers in the UK using data from the British Household Panel Survey and Understanding Society (2016 - 2021) and exploiting a Regression Discontinuity Design (RDD) framework. By focusing on the health-related effects of minimum wage discontinuities, we consider the National Minimum Wage (NMW) regulation introduced in the UK in 1999 to examine how a possible exogenous increase in income may affect the health outcome of younger workers.
The UK National Minimum Wage (NMW) regulation provides a very good setting to identify the causal effects of minimum wage on health by exploiting an RDD framework. However, since the youth minimum wages can be described as a stepwise increasing function of a worker’s calendar age, we have to deal with multiple cutoffs when estimating our RDD models. We address this matter by adopting both a standard “normalizing and pooling” approach and the novel ”cumulative multiple cutoffs” approach developed by Cattaneo et al. (2020, 2021).
In our empirical analysis we consider as dependent variables two different measures of health, that is physical and mental health. Our main results suggest that the increase in minimum wage has a positive effect on the physical health of workers when they turn 21, but it does not have significant effects at the other age cutoffs. The magnitude of this effect is larger if we adopt the novel “cumulative multiple cutoffs” approach by Cattaneo et al. (2020, 2021) instead of the standard “normalizing and pooling” approach. Our findings remain robust across various specification tests.
Speaker
Silvana Robone (Univesity of Eastern Piedmont, Alessandria, Italy)
Convener/Organiser: Dr Luca Andriani
Contact name:
Luca Andriani
- Silvana Robone (University of Eastern Piedmont, Italy)