Hungry no more? The joint impact of minimum wages and the Earned Income Tax Credit on food insecurity

In this study, we provide evidence on the combined effect of state minimum wages and state Earned Income Tax Credit (EITC) benefits on food insecurity. Using data from the Current Population Survey Food Security Supplement (CPS-FSS) between 2001 and 2019 and a sample of individuals with at most a High School degree, we estimate difference-in-differences models to examine whether the policies have a joint impact on food insecurity. Our study adds to a small number of papers evaluating potential interactions between state minimum wages and EITC laws. Our analysis reveals the presence of joint effects of the two programs in terms of reducing food insecurity. We find that a $1 increase in minimum wages reducing the likelihood of households experiencing very low food security by 6.0 percent in states with state EITC laws, with the effect being even larger (9.8 percent) in states with high EITC benefits. When examining a potential mechanism through which the two policies improve food security, we provide evidence for a joint impact on reducing poverty rates. In contrast, we find no evidence that minimum wages alone impact food insecurity or poverty rates in states without state EITC laws.