Wednesday, November 9, 2016

Three specific economic policies, namely higher tax credits for the poor, increasing state-level minimum wages and not requiring union membership as a condition of employment, can have positive health benefits, according to a study out today in Health Affairs.

A research team led by Elizabeth Rigby, PhD, associate professor at George Washington University, and funded by the Robert Wood Johnson Foundation’s (RWJF) Public Health Law Research program, pooled data from all 50 states between 1990-2010 to examine the impact economic policies may have on health.

The study evaluated eight common state economic policies that determine tax levels, spending on health and welfare, and regulations that shape the labor market to understand how those policies impact population health.

“Economic policies are often overlooked for their potential to improve health,” Rigby said.  “There is an extensive body of research that tells us that the significant gap in wealth between rich people and poor people also impacts their health.”

“This study helps us understand how those same economic policies that shape income may also impact American’s health, and sheds light on the challenges that must be overcome to better incorporate economic policy in these efforts,” Rigby continued.

The team considered smoking rates, obesity rates, infant deaths, cardiovascular deaths, years of potential life lost, and low birth weight, along with a composite “poor health” score as indicators of health.

The eight policies examined nationwide were: the state tax burden on the rich, tax credits for the poor, the corporate tax rate, the sales tax rate, health and welfare spending, the state minimum wage, whether the state had a right-to-work law (preventing non-union members from being employed), and the amount that employers contributed to a state unemployment insurance program.

In three of the eight policies — tax credits for the poor, the state minimum wage, and the absence of a right-to-work law — the researchers saw improvements across multiple areas of health, such as the adult smoking rate, the rate of deaths from cardiovascular disease, low birth weight, and years of potential life lost. 

Specifically, states with higher-than-average minimum wages had lower rates of smoking and obesity, compared to states with average minimum wages. And states with larger tax credits for the poor saw significantly better rates in indicators across the board — in all areas except smoking.

The tax burden on the rich, the corporate tax rate, and the sales tax rate were only minimally impactful on health — positively or negatively. While the other economic policies impacted between three and five health outcomes, greater tax burdens on the rich and greater than average corporate tax rates were each associated with only one measure of health.

In general, the new study finds little evidence that economic policies shaping disposable income of high-income Americans or businesses have broad and significant impacts on population health.

“The bottom line is that higher tax credits to the poor, higher minimum wages and the lack of a right to work law that limits union power also happen to be the most likely policies to increase the incomes of low- or middle-income families,” Rigby said.  “Boosting the incomes of these lower income families may be a pathway to better health.”

Dr. Rigby will appear on a panel on November 10 at the Capital Hilton Hotel in Washington, DC to discuss the paper in the context of a Culture of Health, along with other authors from this issue of Health Affairs. RSVP here.

Bethany Saxon
Public Health Law Research
Tel. 215-204-2134