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Want to decrease suicide? Raise the minimum wage, researchers suggest

Wall Street bonuses outpace minimum wage
Wall Street bonuses outpace minimum wage 00:38
  • A new study finds that economic policies can reduce so-called "deaths of despair."
  • Raising the minimum wage and the federal Earned Income Tax Credit by 10 percent each could prevent 1,230 suicides per year.
  • By contrast, boosting pay and federal aid for lower-income workers doesn't significantly reduce drug-related deaths.

What some experts call "deaths of despair" -- fatalities related to alcohol, drugs and suicide -- have risen in recent years among Americans without a college degree, contributing to a decline in life expectancy in the U.S. Now new research suggests a way to deter people from killing themselves: pay them more.

Increasing the minimum wage by 10 percent reduces suicides among adults with a high school degree or less by 3.6 percent, according to a study published by the National Bureau of Economic Research. A 10 percent hike in the Earned Income Tax Credit -- a federal subsidy for low-income families -- reduces suicides among the same group by 5.5 percent. Increasing both measures by 10 percent would prevent a total of 1,230 suicides per year, 

Notably, the study posits a direct causal link between people's wages and suicide rates. That goes further than most other previous research, which generally only suggests a link between the minimum wage and suicide. 

"The minimum wage and the EITC represent the two most important policy levers for raising incomes for low-wage workers. Yet no one has previously examined the causal effects of these two policies on suicides and drug deaths -- a huge knowledge gap," the study states.  

By contrast, increasing pay and federal aid for lower-income workers didn't significantly reduce drug-related deaths, the researchers found. 

"Significant reductions" in suicides

An increase in the minimum wage was linked to an immediate decrease in suicides, while raising the EITC had a delayed effect, resulting in fewer suicides the following year, said Anna Godoy, one of the paper's authors and a labor economist at the University of California, Berkeley.

"Over the last 20 years, drug overdoses and suicides increased dramatically, especially among people without college degrees. In this paper we wanted to examine if economic policies aimed at low-wage workers could make a difference, and what we found was that higher minimum wages and state-earned income tax credits led to significant reductions in non-drug related suicides among people without a college degree," Godoy said. 

Focusing on the years 1999 through 2015, the researchers relied on Center for Disease Control and Prevention data showing the cause of death, and demographics including age, education and state of residence between 1999 and 2015 to compare the number of suicide and drug-related deaths in states that had changed their economic policies. 

"We zoomed in on the time of the policy change to see how suicide rates had changed in the years leading up to the policy change, compared to the years immediately following the change in policy," Godoy said. 

The study's findings did not encompass college-educated adults, who are less likely to hold minimum-wage jobs or qualify for federal help.

It's unclear what effect an even sharper wage increase would have on suicide rates. "It's kind of an open question -- if our findings can be extrapolated to higher minimum wages," Godoy said. 

What's clearer is that non-drug related suicides fell quickly once workers had more money in their pockets, underscoring the link between economic policy and mental health. 

"The discussion about economic policies and the minimum wage is often framed in narrow economic terms and our studies show it's not just jobs and wages that are affected, they are also likely to affect mental health," Godoy said. 

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