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Federal minimum wage expansion to homecare workers: Employment and income effects

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  • Dao, Ngoc

Abstract

The rapid growth of the home care industry coincides with increases in the proportion of the population over 65 years of age and more likely to need assistance with basic daily activities due to illness or disability. Yet, the growth in home care use has been accompanied by concerns about the quality of the care provided. Higher wages and better legal protection might improve the quality of home health care services. This study examines the 2013 Home Care Rule promulgated by the Department of Labor, which added home care workers to the groups covered under the federal minimum wage with minimum hourly and overtime rates. The results show large effects (7–9 %) on part-time employment increase, small effects on work hour reduction (by 2–4 %), and non-negative effect on overall employment level following the expansion. Despite the decline in hours worked, there is no negative impact on earnings among homecare workers.

Suggested Citation

  • Dao, Ngoc, 2024. "Federal minimum wage expansion to homecare workers: Employment and income effects," Labour Economics, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:labeco:v:87:y:2024:i:c:s0927537124000071
    DOI: 10.1016/j.labeco.2024.102511
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    More about this item

    Keywords

    Minimum wage expansion; Homecare workers; Employment effects; Income effects;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • I1 - Health, Education, and Welfare - - Health

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