Do Minimum Wage Increases Impact Employment and Health Insurance Coverage for Older Adults?

• In Event: Health and Economic Outcomes

Abstract

This study examines the effects of minimum wage increases on employment and health insurance coverage among older Americans. While most existing research focuses on younger workers, a growing share of older adults—particularly those approaching retirement—earn near the minimum wage, underscoring the need to assess policy impacts on this demographic. Given the strong link between employment and health insurance access in the United States, changes in wage policy may indirectly influence insurance coverage, especially for near-elderly individuals who may lack access to both employer-sponsored plans and Medicare.

Using data from the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) from 2001 to 2018, this study addresses three questions: (1) How do minimum wage increases affect employment among individuals aged 50–69? (2) How do they influence health insurance coverage among those aged 50–64? (3) Are the effects heterogeneous across age groups, particularly in relation to Social Security and Medicare eligibility?

Employment outcomes include employment status and full-time, full-year employment. Health insurance measures encompass own-name and dependent employer-sponsored coverage, Medicaid enrollment, and any insurance coverage. The Medicaid analysis includes individuals up to age 69 to account for potential Medicare interactions.

Findings indicate that minimum wage increases are associated with increased employer-sponsored coverage among low-wage workers and higher Medicaid enrollment among non-workers aged 50–61. Among non-workers aged 62–64, employer-sponsored and overall coverage decline, while Medicaid enrollment rises. No significant effects are observed for individuals aged 65–69. These results suggest minimum wage policies may shift older non-workers from private to public insurance, with limited labor market effects.

Author

• Soohyun Kim, sookim@syr.edu