Historically, most of the research on minimum wage policy, both federal and state, has focused on overall economic impacts such as income and employment effects. Very limited research, until the past decade, has examined how minimum wage increases impact child and family poverty, birth outcomes, and parent and child health, but the emerging evidence finds positive impacts in these areas. This review identified 17 strong causal studies that examined the impacts of higher state and local minimum wages specifically for families, children, and parents. The literature on the minimum wage is vast, and many additional rigorous studies offer important findings on employment, earnings, health, and other outcomes for adults or national samples more generally. These findings are mentioned throughout this review but are not the focus.
Most of the studies in this review examined incremental increases in state minimum wages, such as the impacts of a $1.00 increase,G a 10 percent increase,D or a given increase above the federal level,E rather than examining the impacts of a particular minimum wage level. However, a review of the state data included in the studies found that most of the empirical evidence revealing beneficial impacts extended to minimum wages up to the $10.00 level. Some studies showed positive impacts for minimum wages as high as $15.00,46,47 but such studies employed simulations and estimates projecting future impacts, rather than examining the effects of increases that had already been implemented, or they were focused on specific localities (e.g., New York City, Santa Clara County) rather than statewide increases. More statewide research on the effects of a $12.00 to $15.00 minimum wage, as more states implement wages in this range, will be valuable for confirming the threshold that provides the greatest impact to families with the least detrimental impacts on employment.
The research discussed here meets our standards of evidence for being methodologically strong and allowing for causal inference, unless otherwise noted. Each strong causal study reviewed that focused on the impact of state and local minimum wages on families with children has been assigned a letter, and a complete list of causal studies can be found at the end of this review, along with more details about our standards of evidence and review method. The findings from each strong causal study reviewed align with one of our eight policy goals from Table 1. The Evidence of Effectiveness table (Table 2) displays the findings associated with higher state minimum wages (beneficial, null,vii or detrimental) for each of the strong studies (A through Q) in the causal studies reference list. For each indicator, a study is categorized based on findings for the overall study population; subgroup findings are discussed in the narrative. The Evidence of Effectiveness table also includes our conclusions about the overall impact on each policy goal. The assessment of the overall impact for each studied policy goal weighs the timing of publication and relative strength of each study, as well as the size and direction of all measured indicators.
Of the 17 causal studies included in this review, nine examined how outcomes differed by race or ethnicity (beyond simply presenting summary statistics or controlling for race/ethnicity).viii Where available, this review presents the analyses’ causal findings for subgroups by race/ethnicity and other aspects of variation, such as family structure, age, or citizenship status. A rigorous evaluation of a policy’s effectiveness should consider whether the policy has equitable impacts and should assess the extent to which a policy reduces or exacerbates pre-existing disparities in economic and social wellbeing.
Table 2: Evidence of Effectiveness for Higher State Minimum Wages by Policy Goal
|Policy Goal||Indicator||Beneficial Impacts||Null Impacts||Detrimental Impacts||Overall Impact on Goal|
|Access to Needed Services||Number of Prenatal Care Visits||H||Null|
|Prenatal Care in First Trimester||H|
|Health Insurance Coverage||K|
|Child Has Medical Home||K|
|Parents’ Ability to Work||Employment||F, J||C, Q||M||Mixed|
|Hours or Weeks Worked||C, J|
|Sufficient Household Resources||Earnings/Income||B, F, J, M||Q||Positive|
|Child Poverty||B, C, F, J, L, M|
|Reduced Public Assistance||B, J|
|Healthy and Equitable Births||Birthweight||E, H||Positive|
|Postneonatal Mortality||D, E|
|Adolescent Births||A, P|
|Healthy Infant Size for Gestational Age||O|
|Parental Health and Emotional Wellbeing||Maternal Stress/Depression||Q||Mixed|
|Smoking During Pregnancy||H|
|Number of Cigarettes Per Day During Pregnancy||H|
|Poverty-Related Antenatal Stress||N|
|Nurturing and Responsive Child-Parent Relationships||Spanking (Maternal and Paternal)||Q||Trending Mixed*|
|Activities with Children (Maternal)||Q|
|Activities with Children (Paternal)||Q|
|Nurturing and Responsive Child Care in Safe Settings||Number of Child Care Arrangements||Q||Trending Null*|
|Optimal Child Health and Development||Neglect||G||Mixed|
|Missed School Days Due to Illness/Injury||I|
|Parent-Reported Child Health||K|
|Illnesses: Ear Infections, Headaches, Colds, and Stomach/Digestive Problems||K|
|Emergency Room Use||K|
*Trending indicates that the evidence is from fewer than two strong causal studies or multiple studies that include only one location, author, or data set.
Access to Needed Services
Two studies identified for this review examined the effects of a higher minimum wage on access to medical and prenatal care, finding null results.H,K A 2020 study examining 46 million births from 1989 to 2012 found that a $1.00 increase in state minimum wages led to no significant increases in the number of prenatal visits or in the likelihood of a mother receiving care in the first trimester, although both results were in the beneficial direction.H A 2019 study examined the impact of higher minimum wages on children’s health care access from 2000 to 2015, finding overall null results for the likelihood of health insurance coverage, having a medical home (a consistent place to receive medical care), and frequency of doctor’s visits (e.g., child saw a doctor in the past year, child had more than one visit in the past year, child had a checkup in the past year).K,ix
Subgroup analyses revealed results in various directions that do not clearly align with the theory of change—for example, children with immigrant parents were significantly less likely to have had a checkup in the past year with a higher minimum wage.K Results for all groups were null when the authors examined whether a child saw a doctor at all in the past year and whether a child saw a doctor for behavioral/mental health needs. More research examining the impact of higher wages on access to health care, including prenatal care, would be valuable, given that only two causal studies currently inform the conclusions for this policy goal.
Parents’ Ability to Work
The possibility that higher minimum wages may lead employers to cut jobs or reduce the number of hours offered to employees is one of the most frequently cited objections to boosting the wage floor. Evidence suggests that state minimum wage increases have mixed effects on employment and hours for low-wage workers,x with most wage increases leading to small, statistically insignificant reductions in employment or no effects at all.45,49,50 Most studies that have found detrimental impacts on employment have examined specific cities or industries rather than statewide increases, have examined levels between $13.00 and $15.00, and/or have found small effect sizes that are outweighed by increased wages, leaving most families better off overall.32,46,51,52,M Some scholars have argued that the minimum wage’s labor supply effects on parents with young children may be different than the findings for adult workers overall, because parents are eligible for different means-tested transfer programs and “face fixed costs of work in the form of childcare [payments]” that other workers may not face (p. 29).J A higher minimum wage may allow parents to “overcome these costs and enter the labor force” (p. 29).J Therefore, an understanding of the minimum wage’s effects on the prenatal-to-3 period requires an examination of studies that focus on parents with children rather than samples of workers in general.
Among the five studies in this review that focused on employment effects for families with children, two found positive impacts on parental employment.F,J A 2011 study using data from 1997 to 2006 found that a 10 percent increase in a state’s minimum wage increased the employment of single mothers (ages 21 to 44) by 7.4 percent when coupled with a 10 percent state earned income tax credit (EITC).F The effects were even greater (9.5 percent) when limiting the sample to lower educated mothers, who are often the population most affected by a minimum wage increase. A higher wage may therefore incentivize parents to enter the workforce when paired with policies like the EITC, which amplify the returns of each hour of work. This study also found that a higher minimum wage boosted the positive earnings and employment effects of the EITC for single Black or Hispanic mothers to a greater degree than for White mothers.
A 2019 study using data from 1980 through 2015 found that a 10 percent boost in the minimum wage increased the likelihood that children of mothers with no college degree had a working parent by 4 percent, with the greatest effects for children ages 0 through 5 (a significant increase of 7.4% in parental employment).J These results were driven by a significant increase in employment among single mothers and married fathers. The study showed null effects overall for hours/weeks worked conditional on employment, but effects were significant and positive for Black mothers’ employment and their annual hours (over 299 additional hours worked per year). The study’s findings, with the greatest positive effects for families with young children (under age 6), are consistent with the authors’ hypothesis about child care costs as a barrier to work for low-wage parents, and the positive impacts that a higher wage can have for facilitating greater employment.J
Another 2019 study, by the same authors as the paper discussed above (Study J), examined minimum wage increases specifically in low-wage regions of the US and detected no significant adverse effects on employment or hours worked.C The study did not find that higher minimum wages had significantly different effects by race (though it did find significant reductions in child poverty in low-wage areas, discussed in the Sufficient Household Resources section of this review).
A report by the National Academies of Sciences, Engineering, and Medicine (NASEM) employed rigorous simulation techniques to estimate the impacts that a variety of economic policies would have on child poverty.M The report examined two possible minimum wage changes using 2015 data. The first was “an increase in the federal minimum wage to $10.25 in 2020 dollars [$9.15 in 2015 dollars], in all states” and the second scenario was one in which “the new value for the regular minimum wage in each state equals the lesser of $9.15 or the 10th percentile of the hourly earnings distribution in that state” (p. 506).M The authors found that the first policy would reduce child poverty, as measured by the Supplemental Poverty Measure,xi from 13 percent to 12.8 percent, and the second scenario would lead to a slightly smaller reduction, bringing child poverty to 12.9 percent. The 0.2 percentage point reduction for the first policy translates to approximately 1.4 million fewer children in poverty, given that the 2015 population of children ages 0 to 18 was approximately 73.6 million.78
The NASEM report estimated an associated job loss of 121,000 among adults and 28,000 among teenagers as a result of the first minimum wage policy, and a smaller impact with the second policy. The two policies would have additional positive impacts on earnings and tax revenue, however. According to the authors, “the two minimum wage policies actually reduce net government expenditures, owing to the fact that they increase earnings, so tax revenues on the earnings increase and expenditures on benefits from transfer programs decrease” (p. 160).M This finding suggests that despite some job loss, workers and families may be better off overall as a result of increased earnings and reduced poverty.
A 2020 study using the Fragile Families and Child Wellbeing data set, which followed approximately 5,000 children born between 1998 and 2000 in 20 cities in 15 states, aimed to examine how local minimum wage increases affect child-parent interactions, such as discipline behaviors like spanking, and the authors examined employment as a possible mechanism that may influence parenting behaviors.Q The authors found no significant impact of higher minimum wages on maternal or paternal employment at age 3. However, maternal employment was significantly reduced at age 5 by 3.6 percentage points.
Studies that focus on large samples of adults or workers in general, rather than parents or families, are not included in the Evidence of Effectiveness table (Table 2), but they find similarly mixed results for employment. One of the earliest and most widely cited studies of state minimum wage increases was a 1994 analysis of the fast food industry in a region that included the New Jersey and Pennsylvania border.54 The study found that employment in New Jersey, which had raised its minimum wage by 80 cents, actually increased 13 percent relative to neighboring Pennsylvania, which did not raise its wage. Three additional studies have found null impacts of higher minimum wages on employment,45,49,50 and three others have found small negative impacts.46,51,52 For example, two studies identified possible job loss in the range of 1,350 to 5,000 fewer jobs per year resulting from city-level increases to $13.00 and $15.00 in Seattle and Santa Clara County, respectively.46,51
Sufficient Household Resources
Evidence from five studiesxii suggests that minimum wage increases lift earnings for low-wage workers and families, leaving them better off given the mostly null or small effects on employment.19 (Four additional studies also support higher state minimum wages as an effective policy to boost household income,32,45,46,50 but their samples were not specific to families with children and effects are therefore not shown in Table 2).
For example, a 2019 study using national data from 1984 to 2013 found that a 10 percent minimum wage increase led to a significant 4.9 percent reduction in child poverty (under age 18).B Significant, large effects were also found for Black and Latinoxiii individuals (a reduction in poverty of 8.7%), and people under age 30 without a high school degree (a 4.3% reduction in poverty). The results suggested that if all states were to raise their minimum wages from their January 2017 levels to $12.00, the US would see a 1.9 percentage point (or 15%) reduction in poverty, representing 6.2 million people transitioning out of poverty. The author also projected a 12.2 percent ($1,826) annual increase in after-tax-and-transfer family earnings among the lowest-income families (those near the 10th percentile).B
Evidence also supports the combination of a higher minimum wage and more generous earned income tax credits (EITCs) as an effective anti-poverty approach. A 2011 study using data from 1997 to 2006 found that a 10 percent increase in the minimum wage, coupled with a 10 percent state EITC,xiv led to an 8.3 percent increase in earnings for single mothers.F The authors concluded that a 10 percent state EITC reduced poverty among single-mother families with children by 1.6 percentage points at the sample mean of state minimum wages, but reduced poverty by 2.3 percentage points when the minimum wage was 10 percent higher than the mean, and by 3.4 percentage points when the minimum wage was 25 percent higher than the sample mean.F
A 2019 study measuring effects from 1980 to 2015 found a significant increase in earned income ($349 in annual earnings, amounting to almost an additional week’s wages at a $10.00 per hour level) for families headed by single mothers following a 10 percent minimum wage increase.J The study found that a 10 percent increase in a state’s minimum wage reduced poverty by 0.6 percentage points, or 5.9 percent, among children with mothers with no college degree. The effects were found to be greatest (9.7%) for children under age 6. A 2008 study using data from 1991 to 2002 found that a 10 percent increase in the real minimum wage (adjusted for inflation) reduced the child poverty rate in single-mother families by 1.8 percentage points.L
A 2021 study examining data from 2005 through 2017 found that higher minimum wages led to significant reductions in child poverty (1.3 percentage points) in regions of the country with the lowest median wages,xv where proportionately more individuals benefited from minimum wage increases.C The study did not disaggregate the child poverty effects by race or ethnicity, but did examine parent employment and wages by race and ethnicity. The positive wage effects were slightly greater for Black and Hispanic workers with a high school degree or less (a 0.6%, statistically significant increase) compared to White non-Hispanic individuals of the same education level (a 0.5% increase, not statistically significant).xvi In the lowest-wage areas, the differential wage effects were even greater with a higher minimum wage: a 2.2 percent increase in wages for Black and Hispanic workers compared to a small, statistically insignificant 0.4 percent decrease for White non-Hispanic workers.
As discussed in the previous section, the 2019 NASEM report also found significant, positive impacts on family earnings and child poverty with higher minimum wages, at approximately the $10.00 level.M The analysis simulated how the higher minimum wage policies would affect subgroups differently, and did not detect a differential effect of either of the minimum wage scenarios on Black or Hispanic children. However, the study did find that the first minimum wage policy would benefit noncitizen children to a greater degree than children overall (see Table 5-1 of the NASEM report).
Two of the studies discussed above also found significant reductions in the receipt of public benefits alongside reduced poverty and higher earned income, suggesting that families achieved better economic security after minimum wage increases, even after accounting for the reduction in public assistance.B,J
Finally, a 2020 working paper found no significant effects of local minimum wage increases on annual household income at child ages 1 or 3 or on child support payments.Q This result may be viewed as an outlier in the context of the many other positive results for household income and poverty reduction.
Healthy and Equitable Births
Although a large research base links greater overall income and wealth to better health across the life span, comparatively few studies have examined the relationship between higher minimum wages and birth outcomes.20,21 However, six recent studies, discussed below, have begun to build the evidence base in this area with modest results in the positive direction.xvii
A 2016 study examined data on birth outcomes from 1980 to 2011 across the US and found that state minimum wages that were higher than the federal floor were significantly linked to a reduced prevalence of low birthweight and postneonatal mortality.xviii,E In particular, each dollar above the federal minimum wage led to approximately a 1 to 2 percent decrease in the prevalence of low birthweight (<2,500 grams) and a 4 percent decrease in postneonatal mortality.E
A 2020 analysis examined 46 million births to women with a high school degree or less between 1989 and 2012 and found that a $1.00 minimum wage increase was linked to a significant 2 gram increase in birthweight and very small, but statistically significant increases in gestation length (0.01 weeks) and fetal growth (0.03 grams per week).H The $1.00 wage increase had small, insignificant effects on reducing the number of preterm births in the authors’ preferred specification.H
A 2018 study using data from 1995 to 2013 found that a 10 percent increase in the cost-of-living adjusted minimum wage was associated with a significant 5.6 percent reduction in postneonatal mortalityxix among mothers with a high school degree or less.D The effect was also significant for the sample of mothers overall, regardless of education level (a 4.5% decrease).
Research suggests a causal connection between higher state minimum wages and reduced teen births. A 2017 study of birth rates in the US from 2003 to 2014 found that a $1.00 increase in a state’s minimum wage led to a 2 percent decrease in births to adolescents.A Overall, this result means that a national $1.00 increase in the minimum wage may lead to 5,000 fewer teen births each year. The decrease was driven by Hispanic and non-Hispanic White teens, who were more likely to be employed than Black teenagers in the sample. The author reasoned that “[h]igher wages might keep adolescents attached to the labor market…and thus provide a reason to delay childbearing or offer a chance to substitute work for leisure” (p. 1).A
A 2021 study using data from 1995 to 2017 also found a positive link—each $1.00 increase in a state’s minimum wage led to a decrease in teen births (15 to 19 years old) of 2.8 to 3.4 percent, depending on the number of controls included in the model.P Notably, the author found that the relationship was significant only in states that had their own earned income tax credits. This finding suggests that higher state minimum wages can work alongside policies like federal and state EITCs to have the greatest positive effect on children and teens in low-income families—a result seen in other studies as well.F,P
A 2020 study assessed the impacts of higher subminimum wages on birth outcomes—subminimum wages are the wages that can be paid to tipped workers, which are often set much lower than the floor for nontipped workers.O The federal subminimum wage was set at $2.13 per hour in 1991 and has remained static since then, even though the federal full minimum wage has increased multiple times since that year.53 The 2020 study used state variation in tipped wages from 2004 to 2016 to examine the effects on infant size for gestational age, and the authors found that when the tipped wage was set at the federal full minimum wage level, the birthweight of the smallest 5 percent of infants increased, and the birthweight of the largest 5 percent of infants decreased, leading to overall healthier birthweights for gestational age.O
Finally, a 2021 study using data from 2001 to 2018 examined the relationship between state wage preemption laws (state laws that prevent cities, counties, and other local jurisdictions from adopting minimum wages higher than the state level) and infant mortality.62 The study found that each additional $1.00 increase in state minimum wages was associated with a 1.3 percent reduction in the infant mortality rate, and as a result, state preemption laws that restricted local increases were linked to as many as 605 preventable infant deaths in 2018.62 The authors consider their analysis to offer “compelling evidence of a causal effect”xx of preemption laws, without establishing a definite causal relationship, so the results are not reflected in Table 2.
Parental Health and Emotional Wellbeing
This review identified three causal studies that examined the impact of minimum wages specifically on the physical or mental health of parents.H,N,Q A 2020 national study using data from 1989 to 2012 found that a $1.00 increase in a state’s minimum wage was not associated with a significant decline in smoking during pregnancy,H,xxi and was actually linked to a small increase in the number of cigarettes that pregnant women smoked (given that they smoked at all), likely because of the “income effect,” or the tendency to purchase more of certain goods when income increases. The effect was 0.2 cigarettes per day for each $1.00 increase in a state’s minimum wage (from a sample mean of 2.1 cigarettes per day).
A 2020 study using data from 2004 to 2014 found that setting the tipped wage at the same level as the federal full minimum wage ($7.25) reduced prenatal poverty-related stress scoresxxii by 19.7 percent among unmarried women of color (defined as non-White and/or Hispanic) with no college degree compared to setting tipped wages at the subminimum ($2.13) level.N The study also found significant results for unmarried women overall (a 15.9% decrease in stress) and for women of color (regardless of marital status—a 10.2% decrease). The 2020 paper using the Fragile Families and Child Wellbeing data set, mentioned earlier, found no significant impact of local minimum wage increases on maternal depression or stress at child age 3.Q
A much broader array of studies have examined impacts on adult health more generally, with samples that included both parents and nonparents, and the overall results are more positive when these studies are considered. For example, a simulation study of adults in New York City estimated that a $15.00 minimum wage, had it been implemented between 2008 and 2012, may have prevented between 2,800 and 5,000 premature deaths (deaths before age 65) in that timeframe in low-income communities.47 Both large and small employers currently must pay a minimum wage of at least $15.00 in New York City.22
Three causal studies have examined links between state minimum wages and adult mental health (regardless of parental status), finding overall positive results. One study examined the effects of higher minimum wages on suicides, estimating that a 10 percent increase in a state’s minimum wage may reduce nondrug suicides among adults with at most a high school degree by 2.7 percent, and the authors noted that higher wages may have prevented 4,800 suicides over the 19 years of data analyzed (from 1999 through 2017).56 The authors also examined the impacts of state earned income tax credits, estimating that if both the minimum wage and state EITCs were increased by 10 percent across states, the US may see 787 fewer completed suicides per year. A 2020 study (using data from 1990 through 2015) corroborated those results, finding that a $1.00 increase in state minimum wages reduced suicides by between 3.4 and 5.9 percent for less-educated adults.56
A 2019 correlational study using data from 2006 through 2016 found that a $1.00 increase in state minimum wages was associated with a 1.9 percent decline in suicides.23 This finding translates to 8,000 fewer suicides during the study years. Finally, a 2021 study found statistically insignificant, though beneficial, effects of a higher minimum wage on the proportion of adults who reported themselves to be in serious psychological distress (a 6% decrease).58
A higher minimum wage may also have impacts on adult physical health; a recent longitudinal study using 13 years of data found that a $1.00 increase in a state’s minimum wage led to lower rates of sexually transmitted infections (STI) among women; the authors measured between an 8.5 percent and 19.7 percent drop depending on the specific STI.59 The authors’ theory was that “poverty, low-wage jobs, income inequality, and other economic structural factors may spread STIs by creating high-risk partner pools, facilitating transactional sex, and perhaps undermining women’s sexual agency” (p. 2).
However, a 2021 study using data from 2008 through 2015 found null effects on adult health outcomes including diabetes, hypertension, overall health, and obesity for the full sample, although women saw an increased likelihood of diabetes with a higher minimum wage, men saw a higher likelihood of obesity, and men saw a lower likelihood of hypertension.58 The authors suggested that a variety of mediating factors complicate the link between higher pay and health; for example, outcomes like obesity have genetic contributions, and some individuals may still not have access to affordable health coverage even with a higher wage.
A recent analysis examined how a higher minimum wage in New Jersey may affect adults’ eligibility for Medicaid given the Affordable Care Act’s (ACA) expansion in health coverage for low-income adults.69 The authors concluded that less than 5 percent of adults (excluding elderly individuals or people with disabilities) on Medicaid would lose Medicaid eligibility as a result of a $15.00 minimum wage, and all would still qualify for ACA subsidies to help them afford health coverage. Overall, family earnings would rise by 17 percent, or an average annual increase of $6,700 in the state.
Nurturing and Responsive Child-Parent Relationships
One study with rigorous methods addressed the impacts of higher minimum wages on child-parent relationships, finding mixed results.Q The authors of the 2020 study found that a $1.00 minimum wage increase was linked to a decline in spanking of children at age 3 by both mothers and fathers (spanking was approximately 7.8 percentage points lower among fathers and 7.4 percentage points lower among mothers affected by the higher minimum wage). Mothers and fathers were each asked to report their own answers for the spanking measure. Mothers were also asked to report how often they, and the child’s biological father, participated in certain activities with children, including: “read stories, told stories, played with blocks or toys, played games, and played outside, among others” (p. 12). The impact of minimum wage increases on maternal activities at age 3 was not significant, whereas paternal activities (as reported by mothers) saw a slight significant increase at age 3 (phasing out by age 5).
Nurturing and Responsive Child Care in Safe Settings
Child care workers are much lower paid, on average, than educators in the public pre-K to grade 12 system.60 Many scholars and advocacy groups argue that paying child care workers more would improve staff retention and boost the quality of child care, ultimately leading to better outcomes for children.60 According to the National Women’s Law Center (NWLC), one in 10 child care workers lives below the federal poverty level, which is twice the poverty rate for all workers.60 The Bureau of Labor Statistics reported that the median hourly wage for child care workers was $12.24 in 2020, which was significantly lower than the national median hourly wage ($20.17).80 The NWLC reported in 2020 that “the child care workforce is 93% women and approximately 40% women of color” (p. 3), so the low wage in this industry has disproportionate impacts by race and gender, exacerbating existing inequities.60
If caregivers struggle with meeting their own basic needs and experience stress as a result, their interactions with children in a child care setting may not be conducive to optimal child outcomes. Recent findings from an ongoing study of child care workers in centers in Seattle and South King County, Washington (where minimum wages were at $15.00 and $12.00, respectively, during the study), and in Austin, Texas (where the federal level of $7.25 continues to apply, per Texas law), found that wages below the median at each site were associated with worse worker health for some indicators (stress, general health, BMI, and cholesterol).85
However, the interaction between higher minimum wages and the child care sector has raised concerns about the supply and affordability of care.27 A descriptive study examined the responses of Seattle child care providers to the city’s gradual minimum wage increase from $9.47 to $15.00 ($16.39 for large employers) between 2014 and 2021.13 The study’s survey of 41 child care centers found that by 2017, 90 percent of the centers had raised prices to account for the increased minimum wage, and the second most common response was to reduce hours or staff.
A 2021 report estimated that a $15.00 federal minimum wage may lead to child care prices rising by 21 percent, or equivalent to a cost of over $3,700 per family per year in a household with two children.70 However, data suggest that child care workers themselves may be better able to support their own families if they were paid a higher wage.77 A minimum wage increase to $15.00 by 2025 would have a significant positive impact for child care workers, over a third of whom are Black or Hispanic.82 Such an increase would raise pay for 44 percent of child care workers, with an average boost of $2,900, and annual earnings of Black and Hispanic child care workers would increase over $3,100.82 This policy would greatly reduce pay disparities within child care and across the country; the 10th percentile wage in the child care industry would increase by 42 percent, and child care workers in southern states would benefit disproportionately since their state minimum wages are currently lower than in other regions of the country.82
Only one causal article addressing the prenatal-to-3 period examined impacts of higher minimum wages on child care, finding that an increased minimum wage had no significant impact on the number of child care arrangements at ages 3 or 5.Q More rigorous, empirical research on family and provider responses to higher minimum wages as they relate to child care would be valuable to the prenatal-to-3 field; in particular, research is needed that allows for an assessment of the impact of wages on child care workers, providers, and families simultaneously.
Optimal Child Health and Development
Evidence suggests that higher minimum wages may have positive impacts on children’s health outcomes. Researchers at the University of Iowa College of Public Health began an ongoing project in 2019 to examine the links between minimum wages and long-term child health and development.24 A 2020 study published as part of that project (using data from the 2003, 2007, and 2011/12 waves of the National Survey of Children’s Health) found that a $1.00 increase in state minimum wages during pregnancy had a null effect on children’s health, but a $1.00 increase from birth through age 5 had a significant positive impact on the likelihood that a child was reported to be in excellent or very good health from ages 6 through 12 (an 8.7% increase).I A $1.00 increase through age 5 also significantly reduced the likelihood that children would miss school from ages 6 through 12 because of illness or injury (a 15.6% reduction in the number of missed school days).
A 2020 study using survey data from 2000 through 2015 found no overall significant effects of higher minimum wages on the health outcomes of children (including those with immigrant or native parents) in the US (such as health rating on a scale of poor to excellent, frequency of emergency room visits, or frequency of specific illnesses).K
A 2017 study (using data from 2004 to 2013) revealed that higher state minimum wages led to reduced child maltreatment rates; in particular, the authors found a 9.6 percent reduction in neglect reports with each $1.00 increase in a state’s minimum wage (a 10.8% reduction for children ages 0 to 5).G Effects were not significant for physical abuse, but were in the beneficial direction (a reduction of 15 reports per 100,000 children for each $1.00 increase). This finding is consistent with prior research on the link between poverty and child neglect reports,25 and the results suggest that higher minimum wages may be an effective tool for improving child welfare by improving parents’ ability to meet their children’s material needs.26 This study found no differences in the impacts of minimum wages by race or ethnicity.
- An impact is considered statistically significant if p≤0.05. Results with p-values above this threshold are considered null or nonsignificant.
- The studies, as labeled in our reference list, are studies A, B, C, F, G, J, K, M, and N.
- Study K included some indicators in the 2019 Institute of Labor Economics version that were not included in the 2020 published paper. Table 2 reflects indicators from both papers because correspondence with the authors confirmed that the 2019 results are still valid but were not the focus of the 2020 paper.
- See studies C, F, J, M, and Q.
- The Supplemental Poverty Measure is an alternative way that the US Census Bureau measures poverty that accounts for cash and in-kind public benefits, taxes, and certain expenses when measuring household income. The measure also sets different thresholds for poverty than the official measure, adjusting for family size and regional housing costs.
- See studies B, F, J, M, and Q.
- The referenced report used “Latino” rather than Hispanic.
- The study did not require the 10 percent supplement to be refundable in this analysis, but the authors noted that over 80 percent of the families in the sample who lived in states with an EITC were in states with a refundable EITC.
- In particular, the study found that the reduction in child poverty was significant in regions of the country where the ratio of the minimum wage to the median wage was 0.6 or greater. (See Table 2, column 4 in the original study).C
- See Table A3, column 1 in the original study.
- See studies A, D, E, H, O, and P.
- Postneonatal mortality refers to deaths from the end of first month to the end of the first year of an infant’s life. Infant mortality more generally refers to deaths at any time in the first year.
- The infant mortality effect in this study was a 3.2 percent reduction, but it was only marginally significant (p<0.1) when state policy controls were included.
- This characterization was offered in email correspondence.
- Given the risks that smoking while pregnant can pose to infants’ health, in addition to that of their mothers, this outcome could also be considered part of the “Healthy and Equitable Births” goal.
- Scores were derived from summing and weighting the occurrence of 10 stressful antenatal events (e.g., moved to a new address, experienced homelessness, separated from partner, lost job, etc.).