M inimum W age Policies and C hild Nutritional Status in LMICs Ninez Ponce, MPP, PhD UCLA Center for Global and Immigrant Health UCLA World Policy Analysis Center Milan, ITALY | 15 July 2015 Health Economics and NUTRITION

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) Sources: WHO & UNICEF

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

Low wages  poverty  food insecurity  undernutrition 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

*Public Sector Health Expenditures **Minimum Wage Policies *Gross National Income Child Nutritional Status Access to Health Services Child Characteristics Links **MACHEquity & World Policy Analyisis Center; *World Bank WDI Database 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 lowest- wage 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 –Gradual reductions over time in inflation-adjusted minimum wages across states explain about 10% of the increases in average body mass since 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 , 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: cross- national information on minimum wage levels, as set by policy, for all LMICs 23 LMIC for which at least two rounds of DHS data (between ) on child anthropometrics were available

Malnutrition Prevalence in Children Under 5 23 LMIC countries STUNTINGFAILURE WASTING STUNTING UNDERWEIGHT

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.