Effects of Family Income on Child Academic Achievement Evidence from Changes in the Minimum Wage

We examine the effect of family earnings on child math and reading test scores using the minimum wage as an instrument for family earnings. We show that a higher minimum wage raises earnings significantly and that the effect of the minimum wage on family earnings varies by maternal skill. Notably a higher minimum wage is not associated with meaningful reductions in maternal labor supply. Overall, we find that maternal (or family) earnings have little effect on child achievement test scores. OLS estimates are positive, but very small. IV estimates are small and mostly statistically insignificant, but precisely enough estimated to rule out benefits exceeding 0.03 standard deviations per additional $1000 earnings