Suicide and the Minimum Wage

There is evidence that a higher minimum wage causes a lower suicide rate. I would not have guessed this:

“Suicide is often connected to financial stress, so it makes sense that increasing income might reduce the risk of suicide. A recent study funded by NIMHD found that every $1 increase in the minimum wage of US states could reduce the suicide rate in people with high school education or less by 6%.”

Estimating the effects of the minimum wage is a rare case of actual change in economists’ beliefs caused by empirical evidence. I remember when even egalitarian economists were very suspicious of the minimum wage guessing that it caused reduced employment (supply and demand and all that). The position was that the earned income tax credit was a much better approach (and it is excellent). Then empirical work by Card and Krueger using variation across the Delaware river showed a surprising result with, if anything, an increase in employment when and where the minimum wage increased.

This is not really hard to reconcile with economic theory (supply and demand and all that is based on the extreme assumption of perfect competition). Further empirical work convinced economists that the negative effect of the minimum wage on employment was, at most, tiny (and possible of surprising sign). So now at least egalitarian economists are convinced. I personally am surprised but not shocked by the result I quote above.

This is just one of many cases in which actual empirical evidence suggests that programs designed to achieve equality also contribute to efficiency.

Suicide is an immensely important national problem. My surprise was due to the fact that I would have guessed that financial distress was not a major factor in determining suicide rates (I would have guessed and still guess that access to guns is a major factor).