The impact of minimum wage increases on cigarette smoking.

ABSTRACT

Recent debate about raising federal minimum wage to $15 per hour receives substantial public attention. Yet the minimum wage literature has been focusing on the labor market outcomes, with the health implications rarely being discussed. This paper investigates the impact of minimum wage increases on multiple dimensions of cigarette smoking behaviors for the low-skilled population using the Current Population Survey-Tobacco Use Supplement over a long time period (1998-2015). Results show that a $1 increase in the minimum wage raises the prevalence of smoking by about 2.3% and reduces cessation by about 13.7% among the low-skilled workers. With further examinations, we find evidence of an income effect as one potential mechanism that leads to more smoking. The impacts on all low-skilled adults, however, are somewhat smaller, which are most likely driven by the null effects among those who are out of the labor force. We additionally conduct a series of sensitivity tests and confirm the robustness of these results.