Do Minimum Wages Really Increase Youth Drinking and Drunk Driving?
Joseph J. Sabia, M. Melinda Pitts, and Laura Argys
Working Paper 2014-20
Download the full text of this paper (888 KB)
Adams, Blackburn, and Cotti (ABC) found that increases in minimum wages were positively related to drunk driving–related traffic fatalities for those ages 16 to 20. The hypothesized mechanism for this relationship—increased alcohol consumption caused by minimum wage–induced income gains—remains empirically unexplored. Using data from two national behavioral surveys and an identification strategy identical to ABC, we find little evidence that an increase in the minimum wage leads to increases in alcohol consumption or drunk driving among teenagers. These results suggest a much smaller set of plausible causal channels to explain ABC's findings.
JEL classification: J38, K42
Key words: minimum wage, teen drunk driving, alcohol consumption
The authors gratefully acknowledge Brittany Bass, Thanh Tam Nguyen, and Timothy Young. They also thank Dhaval Dave and participants at the 2014 International Health Economics World Congress at Trinity College in Dublin, Ireland, for helpful comments. The views expressed here are the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility.
Please address questions regarding content to Joseph J. Sabia, Department of Economics, San Diego State University, 5500 Campanile Drive, San Diego, CA 92182-4485, firstname.lastname@example.org; M. Melinda Pitts (contact author), Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street NE, Atlanta, GA 30309-4470, 404-498-7009, email@example.com; or Laura Argys, Department of Economics, University of Colorado-Denver, Campus Box 181, P.O. Box 173364, Denver, CO 80217-3364, 303-556-3949, firstname.lastname@example.org.