Minimum wage increases lead to increased point-in-time homeless population counts; further analysis suggests disemployment and rental housing prices, but not migration, as mechanisms

Hill, Seth J. 2023. “Minimum Wages and Homelessness.” OSF Preprints. June 5. doi:10.31219/osf.io/z2fqj.

Abstract: America's cities continue to struggle with homelessness. Here I offer a factor, the minimum wage, that adds to existing individual and structural explanations. If there are negative distributional consequences of minimum wages, they most likely harm the lowest-skill workers many of whom already face housing insecurity. To evaluate this argument, I study minimum wage changes in American cities and states 2006 to 2019. Using difference-in-differences methods for staggered treatments I find that minimum wage increases lead to increased point-in-time homeless population counts. Further analysis suggests disemployment and rental housing prices, but not migration, as mechanisms. Scholars and policymakers who aim to understand and combat homelessness should consider labor market opportunities. Distributional consequences of minimum wage laws also merit further inquiry.