Presented By: Department of Economics
Minimum Wages and Workplace Injuries with Michael Davies and R Jisung Park
Anna Stansbury, MIT Sloan

Do minimum wage changes affect workplace health and safety? Using the universe of workers' compensation claims in California over 2000-2019, we estimate whether minimum wage shocks affect the rate of workplace injuries. Our identification exploits both geographic variation in state- and city-level minimum wages and local occupation-level variation in exposure to minimum wage changes. We find that a 10% increase in the minimum wage increases the injury rate by 11% in an occupation-metro area labor market which is fully exposed to the minimum wage increase. Our results imply an elasticity of the workplace injury rate to minimum-wage-induced wage changes of 1.4. We find particularly large effects on injuries relating to cumulative physical strain, suggesting that employers respond to minimum wage increases by intensifying the pace of work, which in turn increases injury risk. A back-of-the-envelope calculation suggests that the increase in injury risk offsets around 10% of the welfare improvement workers see as a result of higher wages.