Can Economic Policies Reduce Deaths of Despair?

Principal Investigator
University of California, Berkeley

Overview

Since 2014, overall life expectancy in the U.S. has fallen each year, reversing a century-long trend of steadily declining mortality rates. This decrease in life expectancy reflects a dramatic increase in deaths from so-called “deaths of despair” – caused by alcohol, drugs and suicide - among Americans without a college degree. William H. Dow, Anna Godoey, Christopher Lowenstein and Michael Reich, representing the P4A Research Hub at the Institute for Women’s Policy Research and the University of California, Berkeley, released a National Bureau of Economic Research Working Paper investigating whether these “deaths of despair” respond to two key policies that raise incomes for low-wage workers: the minimum wage and the Earned Income Tax Credit (EITC).

Findings

The authors used mortality data from the Centers for Disease Control and leveraged state variation in minimum wage and EITC policies over time to identify the causal effects of wage policy changes on mortality for people aged 18-64 without a college degree. Their statistical methods included a variety of robustness and falsification tests.

While the authors found no significant effect of either policy on drug mortality, non-drug suicides declined significantly with higher minimum wages and EITCs, especially among women. The estimates suggest that increasing both the minimum wage and the EITC by 10 percent prevented a combined total of over 1,200 suicides each year.

Implications for Policy and Practice

U.S. health policy makers and researchers across a broad array of disciplines have sought to understand the causes of and effective policy responses to recent mortality trends. The minimum wage and the EITC represent the two most important policy levers for raising incomes for low-wage workers, yet no one had previously examined the causal effects of these two policies on suicides and drug deaths.

Consistent with other recent studies on the effects of minimum wages and the EITC on physical and mental health outcomes, these findings point to a substantial public health benefit of increasing the minimum wage and expanding the EITC to help combat the high and increasing levels of deaths of despair. The benefits of both policies extend beyond simply increasing income and employment. Examining longer-term effects of the wage structure on health outcomes remains a high priority for future research.

Published
in
National Bureau of Economic Research