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Worker Earnings, Service Quality, and Firm Profitability: Evidence from Nursing Homes and Minimum Wage Reforms

Report Wages & Benefits
June 3, 2020

This paper examines whether higher wages paid to low-income workers affects the quality of services they provide, focusing on the relationship between wage variation for direct care staff in long-term residential care settings (driven by minimum wage reforms) and resident health outcomes.

Key Takeaways

Minimum wage increases improve nursing assistants’ wages, as well as turnover and retention rates.
Such gains translate into marked improvements in resident health and safety.
Higher wages in the nursing home sector can be fully offset by improvements in care.

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