The Minimum Wage and the Social Determinants of Mental Health

There’s a new study in Health Economics that looks at the effect of Britain’s minimum wage law on the mental health of low wage workers.*

Does increasing incomes improve health? In 1999, the UK government implemented minimum wage legislation, increasing hourly wages to at least £3.60. This policy experiment created intervention and control groups that can be used to assess the effects of increasing wages on health. Longitudinal data were taken from the British Household Panel Survey. We compared the health effects of higher wages on recipients of the minimum wage with otherwise similar persons who were likely unaffected because (1) their wages were between 100 and 110% of the eligibility threshold or (2) their firms did not increase wages to meet the threshold. We assessed the probability of mental ill health using the 12-item General Health Questionnaire. We also assessed changes in smoking, blood pressure, as well as hearing ability (control condition). The intervention group, whose wages rose above the minimum wage, experienced lower probability of mental ill health compared with both control group 1 and control group 2. This improvement represents 0.37 of a standard deviation, comparable with the effect of antidepressants (0.39 of a standard deviation) on depressive symptoms. The intervention group experienced no change in blood pressure, hearing ability, or smoking. Increasing wages significantly improves mental health by reducing financial strain in low-wage workers.

In the The New Republic, I argue that this study is important because it shows us a way to attack the social determinants of mental health.

we need not just better treatment but also preventive mental health care: public policies that reduce the number of people who become mentally ill. Cholera was defeated in the industrialized world by clean drinking water, not antibiotics. Similarly, we need to develop strategies for attacking the social determinants of mental health problems.

The finding that you can reduce mental health problems by increasing the minimum wage is important because raising the wage is easier than redesigning the mental health treatment system. Getting mental health services into poor communities and getting poor people to access them are largely unsolved problems. How to pass and enforce a minimum wage law is well-understood.

In the wake of all the mass shootings, many US politicians have called for ‘mental health reform’.  I’m all for improving mental health care, but small tweaks to how that system is administered will not change population mental health. The British data suggest, however, that we might be able to reduce the rate of mental illness in a highly-stressed subpopulation by providing them with a living wage.

*Thanks to Austin for calling my attention to this article.


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