Milan, ITALY | 15 July 2015
Health Economics and NUTRITION
Minimum Wage Policies and
Child Nutritional Status in
LMICs
Ninez Ponce, MPP, PhD
UCLA Center for Global and Immigrant Health
UCLA World Policy Analysis Center
Coauthors
Riti Shimkada UCLA Center for Global &
Immigrant Health
Amy Raub UCLA Center for World Health
Linda Richter Human Sciences Research Council
Arijit Nandi MACHEquity, McGill University
Adel Douad Max Planck Institute & University of
Gothenburg
Jody Heymann UCLA Center for World Health
The Problem
Globally in 2013…
• 161 M under-five year olds were
stunted (25%)
• 2000 2013 stunting 33% 25%
• 51 M under-five year olds were
wasted (8%)
• 45% of all child deaths are linked to
malnutrition ~2.8 M deaths
Sources: (Black et al. 2013); (UNICEF et al. 2014)
Focus on LMICs
• Low-income:
GNI pc <$1,045
• Middle-income: GNI pc [$1,045, $12,746]
• In 2015 Italy $34,280, US $55,200
• Malawi $250 , Norway $103,050
4 Mal(under)nutrition Measures
1. Stunting: HAZ < - 2SD
– HAZ = Height-for-age Z-score
2. Underweight: WAZ < - 2SD
– WAZ = Weight-for-age Z-score
3. Wasting: WHZ < - 2SD
– WHZ = Weight for height Z-score.
4. Anthropometric Failure~ any of these
indicators
• Based on WHO (2006) guidance on reference
population and omission of outliers
Why Examine Minimum Wage
Impacts in LMICs?
• Impact on undernutrition not
overweight and obesity especially in
young children
• Even small wage increases could have
major impact on household finances of
families living in poverty and economic
hardship
• Increasing awareness of/interest in
role of wage policies and health
outcomes in LMIC, but we don’t know
the effect
Low wages poverty food insecurity undernutrition
*Gross
National
Income
Child
Characteristics
Child
Nutritional
Status
**Minimum
Wage Policies
*Public Sector
Health
Expenditures
**MACHEquity & World Policy Analyisis
Center; *World Bank WDI Database
Access to Health
Services
Links
Demographic & Health Surveys
Minimum Wage: Important Policy Lever, but
Unknown Direction of Effect, If Any
• Employment impact
– Exacerbates unemployment and thus eventually
exacerbates poverty?
• Impact on informal sector
– Minimum wage not meaningful for the lowestwage workers in informal sector
– However, Spillover from minimum wage to
informal sector has been observed in some LMIC
(e.g. Latin America
•
Worker displacement
– Displaces workers, pushing them into the informal
sector where wages are lower
Only a Few Recent Studies on Minimum
Wage Impact on Health
• Behavioral Risk Factor Surveillance
System (BRFSS) from 1984-2006.
– Gradual reductions over time in inflation-adjusted minimum
wages across states explain about 10% of the increases in
average body mass since 1970.
• Panel Study of Income Dynamics (PSID)
data used to examine wage and adult
health outcomes.
– Low wages predicted increases in the prevalence of obesity
and hypertension.
• Lack of studies in LMIC setting
Our Study: Examining link between
Minimum Wage & Child Outcomes
• 2003-2012, a recent period spanning from before,
through, and after the global economic crisis
• Minimum wage data from McGill’s MACHEquity,
UCLA’s WORLD Policy Analysis Center: crossnational information on minimum wage levels, as
set by policy, for all LMICs
• 23 LMIC for which at least two rounds of DHS data
(between 2003-2012) on child anthropometrics
were available
Malnutrition Prevalence in Children Under 5
23 LMIC countries
STUNTING
FAILURE
UNDERWEIGHT
WASTING
Analysis
• Primary Regressor: hourly minimum wage rates in
purchasing power parity (PPP) dollars—lagged 1y
• Primary Outcomes: anthropometric measures of stunting,
underweight, wasting and a composite measure of
anthropometric failure
• Covariates: variables from the child (age, gender, birth order),
parent/household (education, relationship status, wealth
index, employment, urban/rural), and country levels (GDP per
capita, public sector health spending per capita, year of DHS
survey)
•
(3 level) LPM random intercept models: children nested in
households nested in countries.
Findings
• With a $1 dollar PPP increase in MW, on average, all
else equal, and accounting for random effects:
– Stunting decreases by 1.36 percentage points from the
mean stunting rate of 33%. (arc elasticity =-.084)
– Failure decreases by 1.24 percentage points from the
mean failure rate of 38%. (arc elasticity =-.072)
• Minimum wage’s protective effects against stunting
and failure were also significant for children in the
poorest quintile households. (arc elasticity =-.06 for
stunting and -.05 for failure)
• For the full sample and for the poorest quintile, we
observed no significant effect of previous year’s
minimum wage policies on wasting, and underweight.
Inference
• Modest effects compared to household income
elasticity of stunting (e=-.6 ; Alderman in Sahn 2015);
GNI growth & stunting ( e= -.2 ; Heltberg PAHO).
• Though elasticities are smaller for poorest quintile
that surely comprise most of the informal sector in
LMICs, MW laws do have a favorable (not
penalizing) effect.
• Effects are for 2 important nutritional outcome
measures: stunting—chronic malnutrition and failure--a composite indicator of the malnutrition.
• This work highlights the potential contribution of
income policies such as minimum wage legislation on
improving population health, especially among poor
children.
Study Limitations
• Not able to obtain data on
the informal work sector
• Not able to collect
information on other
potential institutional
confounders, such as which
jobs are covered by the
minimum wage or how well
the minimum wage policy is
enforced.
• We do not know whether
the prevailing market wage
is above the minimum wage
and we cannot parse out
the impact of gender.
This unobserved heterogeneity is
partially addressed by specifying
a set of model covariates that
may explain these unmeasured
labor market characteristics at the
parent/household and country
levels as well as by partitioning
the variance at multiple levels.