ORIGINAL RESEARCH article
Front. Public Health
Sec. Health Economics
Volume 13 - 2025 | doi: 10.3389/fpubh.2025.1646631
This article is part of the Research TopicPublic Health Outcomes: The Role of Social Security Systems in Improving Residents' Health Welfare, Volume IIView all 14 articles
The Impact of Minimum Wage on Medical Expenditures and Resource Misallocation: Evidence from China's Healthcare System
Provisionally accepted
- 1Tianjin Normal University, Tianjin, China
- 2Nankai University, Tianjin, China
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While minimum wage policies are widely advocated for promoting health equity, empirical evidence on their impact on healthcare utilization remains limited. This study uses micro-level data from China's National Medical Institution Census to examine how regional minimum wages affect individual medical expenditures. Using an instrumental variable (IV) strategy, we find that a one-yuan increase in the minimum wage raises outpatient spending per visit by 0.36 yuan, inpatient spending per admission by 7.90 yuan, and pharmaceutical spending per visit by 0.38 yuan. Mechanism analysis points to three contributing factors: higher demand for chronic disease management, increased use of inpatient and surgical services, and the preference for higher-quality care, particularly in for-profit and tertiary hospitals. Moreover, higher minimum wages strengthen the gatekeeping role of primary care while simultaneously increasing inpatient demand at tertiary hospitals, thereby exacerbating resource misallocation and inefficiency within China's hierarchical healthcare system. These findings underscore the need to better coordinate wage policies with healthcare system design to ensure equitable and efficient service delivery.
Keywords: minimum wage, Medical expenditure, hierarchical medical system, Medical resource allocation, China
Received: 13 Jun 2025; Accepted: 04 Sep 2025.
Copyright: © 2025 Yang, Sha and An. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Chenbing Sha, Nankai University, Tianjin, China
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