Economists are still debating the limited data that exists on whether raising the minimum wage leads employers to lay off a significant amount of workers. But what about the impact on other areas of life, outside the labor market? This is another elusive question that a growing number of academics have been exploring in recent years. For instance, the White House’s economic advisors recently found a correlation between increasing the minimum wage and reduced crime rates.
A new working paper, published last month by researchers at the University of Iowa, the University of Illinois, and Bentley University, shows that a wage hike in a given area can benefit the health of newborn babies born there. The study is one of the first to explore the impact of minimum-wage hikes on infant health. It found that, between 1988 and 2012, increases in the minimum wage were linked to an increase in newborns’ fetal growth and birth weight, specifically among babies born to mothers without a college degree. The study also shows that those mothers were slightly more likely to seek prenatal care and smoke less during pregnancy.
The researchers analyzed 45.8 million birth records for pregnancies from 1988 through 2012, during which the federal minimum wage nearly doubled, from $3.35 to $7.25. During that same period, wages in states whose minimums exceed what’s mandated federally—that’s 29 states, plus the District of Columbia—also roughly doubled. Some of those 29 states raised their wages as the federal bar was raised, but others didn’t. After comparing data on the pregnancies of women living in states where the minimum wage increased to similar data for women living in states where it remained the same, the researchers found that the marginal $1 increase in the minimum hourly wage was associated with a 0.4-ounce increase in birth weight and a 2 percent decrease in the risk of a baby having a low birth weight.