Minimum wage and employer‐sponsored supplementary health insurance: Evidence from Canada

Abstract This study explores the effect of increases in the minimum wage on the probability of receiving employer‐sponsored supplementary prescription drug insurance through the workplace in Canada: Do Canadian employers respond to higher minimum wage by cutting insurance coverage? We use self‐reports on supplementary health insurance through the workplace from seven waves (2013 to 2019) of the Canadian Community Health Survey. We also use the fact that the minimum wage is a provincial jurisdiction in Canada to study the effects of the level of and changes in the minimum wage across provinces and over time in a difference‐in‐differences and triple difference framework. We find that yearly changes between 20 and 30 cents in the value of the minimum wage have a persistent effect and about three percent of Canadians lose their prescription drug insurance (from an initial coverage rate of 47.4%) in such cases, the effect being concentrated on women, immigrants, non‐Whites and younger adults. However, changes smaller than 20 cents, by far the most frequent in Canada, do not have any discernible effect on health insurance coverage.