Minimum wage and child health: Evidence from the 1966 Fair Labor Standards Act

In the minimum wage literature, much of the focus has been on the effects of minimum wage changes on employment, wages, earnings of labour market participants, and income. However, through its influence on parents’ income, time allocation, and capacity for health investment, a change in minimum wage can also affect child health. In this study, I examine the effect of the minimum wage introduced by the 1966 Fair Labor Standards Act on child health. The study uses intergenerational survey data from US households in the Panel Study of Income Dynamics (PSID) and employs a difference-in-differences research design. The results show that the introduction of a minimum wage increases the likelihood of a healthy childhood. The effect is not homogeneous across states; it is stronger in states without prior minimum wage policies, where the Act represented a larger shock. The results further reveal significant gender heterogeneity, indicating that the health improvement effect of the minimum wage policy is substantially stronger for girls than for boys. The findings are robust to a range of additional validation exercises, including event-study specifications, spillover analyses, and placebo tests.