The Impact of Minimum Wage Policy on Alcohol Use Disorder: A Quasi-Experimental Study in South Korea.

ABSTRACT

South Korea's 2018 minimum wage hike was examined for its impact on potential alcohol use disorders among affected individuals, using data from the Korea Welfare Panel Study (2015-2019). The study sample was restricted to workers aged 19-64 employed over the study years. The treatment group was identified as those below minimum wages, and the control group as those earning more than minimum wages in 2016-2017 (n=3,117 control, n=578 treatment). Using outcomes derived from the Alcohol Use Disorders Identification Test, our results from difference-in-differences models showed that the 2018 wage hike was linked to a 1.9% increase in the 'high risk' of alcohol use disorder and a 3.6% rise in hazardous consumption in the treatment group. Notably, the effects were more pronounced among men and those aged 50-64. Additionally, we confirmed that the spillover effects extended to workers earning up to 20% above the minimum wage. This study underscores the unintended substance use risk of minimum wage policies in the East Asian context. As wage policies are implemented, integrated public health campaigns targeting at-risk groups are required.