In 1963, President Kennedy proposed making permanent a small pilot project called the Food Stamp Program (FSP). By 2013, the program's fiftieth year, more than one in seven Americans received benefits at a cost of nearly $80 billion. Renamed the Supplemental Nutrition Assistance Program (SNAP) in 2008, it currently faces sharp political pressure, but the social science research necessary to guide policy is still nascent.
In SNAP Matters , Judith Bartfeld, Craig Gundersen, Timothy M. Smeeding, and James P. Ziliak bring together top scholars to begin asking and answering the questions that matter. For example, what are the antipoverty effects of SNAP? Does SNAP cause obesity? Or does it improve nutrition and health more broadly? To what extent does SNAP work in tandem with other programs, such as school breakfast and lunch? Overall, the volume concludes that SNAP is highly responsive to macroeconomic pressures and is one of the most effective antipoverty programs in the safety net, but the volume also encourages policymakers, students, and researchers to continue examining this major pillar of social assistance in America.
About the Author
Judith Bartfeld is professor in the School of Human Ecology at the University of Wisconsin–Madison and the Director of the RIDGE Center for National Food and Nutrition Assistance Research at the Institute for Research on Poverty.
Craig Gundersen is the Soybean Industry Endowed Professor of Agricultural Strategy in the Department of Agricultural and Consumer Economics at the University of Illinois.
Timothy M. Smeeding is Arts and Sciences Distinguished Professor of Public Affairs and Economics at the University of Wisconsin–Madison and, from 2008 to 2014, was Director of the Institute for Research on Poverty.
James P. Ziliak is the Carol Martin Gatton Endowed Chair in Microeconomics and the Founding Director of the Center for Poverty Research at the University of Kentucky.
Read an Excerpt
How Food Stamps Affect Health and Wellâ"Being
By Judith Bartfeld, Craig Gundersen, Timothy M. Smeeding, James P. Ziliak
STANFORD UNIVERSITY PRESSCopyright © 2016 Board of Trustees of the Leland Stanford Junior University
All rights reserved.
Why Are So Many Americans on Food Stamps?
The Role of the Economy, Policy, and Demographics
James P. Ziliak
Since its inception fifty years ago, the Supplemental Nutrition Assistance Program (SNAP) has become a central component of the social safety net in the United States. The program is unique in its status as something akin to a universal entitlement; that is, subject to meeting low-income and asset tests, the program does not impose restrictions on eligibility based on age (Social Security), family structure (Temporary Assistance for Needy Families, or TANF), or work history (Disability Insurance and Unemployment Insurance). Today, one in seven Americans receives assistance from SNAP at a cost approaching $80 billion in FY2013, making it the second largest means-tested transfer in terms of cost after Medicaid. For much of its first three decades, SNAP operated in the shadows of the safety net, in terms of both a policy or research interest, especially in comparison to politically contentious programs like TANF and more expensive programs like Medicaid. What has caught the attention of policy makers and researchers alike in recent years is the rapid growth of the program. Since FY2000, the number participating has increased 171 percent and inflation-adjusted spending by 286 percent. This has led to calls for programmatic reforms, ranging from the 2013 House Bill H.R. 3102 that would cut $39 billion over the next decade to wholesale decentralization in the form of a block grant to states with additional work requirements similar to TANF (Secretaries' Innovation Group 2013).
The aim of this chapter is to document the factors underlying the evolution of program participation since 1980. I emphasize three major points in my analysis: changes in the macroeconomy, both cyclical forces from the labor market and secular trends in income inequality; changes in public policies, both food and nonfood related; and shifting demographics of the American household. I begin by describing the socioeconomic and policy climate in recent decades that have had bearing on SNAP participation, followed by a formal empirical analysis of those determinants and detailed simulations of the relative contributions of the economy, policy, and demographics to changes in SNAP participation over time. The results suggest that SNAP is operating effectively as an automatic fiscal stabilizer — nearly 50 percent of the increase in participation from 2007 to 2011 is due to the weak economy — but policy reforms expanding access and benefit generosity also affected participation, accounting for nearly 30 percent of the increase after the Great Recession. The changing demographics of the American household are helping restrain growth in SNAP.
The rush to cut or reform SNAP may be misplaced if growth in the program is primarily due to the weak labor market and economy over the past decade. There is extensive research evidence that SNAP functions effectively as an automatic fiscal stabilizer, meaning that, as the economy and market incomes fall during recessions, participation in SNAP "automatically" rises to smooth consumption, and as market incomes rise during economic expansions, participation falls (Wallace and Blank 1999; Blundell and Pistaferri 2003; Gundersen and Ziliak 2003; Ziliak, Gundersen, and Figlio 2003; Bitler and Hoynes 2010; Klerman and Danielson 2011; Ganong and Liebman 2013). This suggests that, as the macroeconomy improves in coming years, participation and cost of SNAP will decline. Indeed, assuming no changes in law, the Congressional Budget Office (CBO) (2012) projected that by 2022 spending on SNAP would fall 23 percent because of improving labor market conditions.
That such a countercyclical link exists seems transparent in Figure 1.1, which depicts trends in aggregate SNAP participation and seasonally adjusted unemployment rates. Highlighted in the figure are years that include a macroeconomic recession as defined by the National Bureau of Economic Research. It is clear that peaks in SNAP usage coincide (perhaps with a lag) with peaks in unemployment rates over the past three decades. A simple time-series regression of SNAP participation on the unemployment rate and a linear trend yields:
[MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] (1)
where standard errors are reported in parentheses. The r-squared of 0.57 says that unemployment rates explain nearly 60 percent of the variation in aggregate SNAP participation (the trend adds nothing to the model). The coefficient on the unemployment rates implies that for each percentage point increase in the unemployment rate, SNAP increases by 0.86 points, or almost 10 percent on the average SNAP participation rate of 9.2 percent over the 1980 to 2011 period. Although this time-series model is simply illustrative, a robust link between the business cycle and SNAP participation remains even in a more fully specified model as estimated in the following discussion.
Concomitant with large swings in unemployment rates, there has also been a sizable secular shift in the distribution of earnings and income that may bear on SNAP participation in recent decades (Piketty and Saez 2003; Autor, Katz, and Kearney 2008; Burkhauser et al. 2012). Figure 1.2 depicts trends in real median household income as well as the ratio of the 90th percentile of real income to the 10th percentile of real income. The median is a robust measure of the center of a skewed distribution, such as income that is used to signify how the typical household is faring, and the 90/10 ratio is a standard measure of inequality. Since 1980, real median income has increased 22 percent to $52,000, whereas 90/10 inequality increased 30 percent. Unlike the expansions of the 1980s and 1990s, however, which each had peaks in income in excess of the prior cycle, median income at the peak of the 2000s cycle was no greater than the 1990s, and in fact by 2011 any gains in median income since 1999 were lost. The flattening out of median income from 2000 to 2007, followed by a sharp decline in the Great Recession, coincides with a sharp increase in income inequality. The latter was driven by continued increases in income at the top coupled with significant declines in income at the bottom of the distribution.
There was little change in basic federal eligibility rules in the nearly two decades leading up to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, also known as welfare reform). Welfare reform, however, had both a direct and an indirect policy effect on SNAP. Directly, it eliminated eligibility for most legal permanent aliens unless they had at least ten years of work experience or were veterans; it eliminated benefits for convicted drug felons; it limited benefits to three months out of any thirty-six-month period for able-bodied adults without dependents (ABAWDS) between the ages of eighteen and fifty working fewer than twenty hours per week or not meeting other work requirements; it reduced the maximum benefit and froze many deductions used in calculating net income; it allowed states to sanction individuals and households for noncompliance with TANF requirements or child support payments; and it mandated that states adopt the electronic benefit transfer (EBT), replacing paper coupons with debit cards (Gabor and Botsko 1998; Gleason et al. 2001). Indirectly, participation was affected by virtue of the fact that half of the food stamp caseload was categorically eligible for stamps via their receipt of TANF benefits, and as welfare reform pulled people off TANF they also dropped receipt of food stamps, at least temporarily (Ziliak, Gundersen, and Figlio 2003). The other policy change that indirectly affected SNAP, even prior to welfare reform (note that in Figure 1.1 participation started to fall three years before PRWORA), was the 1993 expansion of the Earned Income Tax Credit (EITC) that pulled scores of single mothers into the labor force and off welfare and food stamps (Meyer and Rosenbaum 2001).
As participation in SNAP plummeted over 40 percent from 1993 to 2000, so too did the take-up rate of benefits; that is, the fraction of eligible persons participating fell over 25 percent to just over 50 percent (Leftin, Eslami, and Strayer 2011). A decline in participation does not have to be associated with a decline in take-up because the decline in participation could occur only among those no longer eligible. Take-up rates among eligible seniors have always been low (30 to 35 percent depending on the year), and the decline in take-up after 1993 was driven mainly by children and nonelderly adults (Cunnyngham 2002). The fall in take-up, which is likely a spillover effect of former TANF recipients also leaving food stamps even though they remained eligible, was met with alarm (and controversy) in policy circles.
In response, several new initiatives aimed at program outreach and eligibility expansion were introduced, and in some cases codified in the Farm Bills of 2002 and 2008, giving much more discretion to the states to improve take-up and program administration. States had always been in charge of day-to-day administration of food stamps, along with employment and training programs, and paid for these duties generally with a 50 percent federal cost share. With the 1996 welfare reform and the ensuing farm bills, states now had greater leeway to tailor the programs to be more consistent with local policy objectives. These included liberalizing vehicle asset tests, such as exempting one or more vehicles from the test, to foster welfare-to-work; expanding (broad-based) categorical eligibility, which allowed states to use more generous TANF asset and gross-income tests to determine eligibility; restoring eligibility for legal aliens previously excluded by PRWORA; expanding the option for simplified reporting, which allowed states to relax the frequency and form (that is, phone or online) of benefit recertification; and outreach via advertising campaigns. Not all of the reforms were intended to make access easier. Specifically, in the 1990s states responded to financial incentives offered by the USDA to reduce benefit error rates by requiring more frequent certification, especially in households with workers, such that by 2000, 36 percent of working households faced three-month or shorter recertification intervals, up from 4.7 percent in 1992 (Kabbani and Wilde 2003). Some of the simplified reporting requirements adopted in recent years were intended to offset the hardship associated with more frequent certification. Another policy that restricted access is fingerprint imaging and facial recognition software.
Table 1.1 summarizes changes in the number of states (and the District of Columbia) adopting various SNAP policy options between 2000 and 2011 based on information in the Economic Research Service's SNAP Policy Database. By 2011, forty-one states had implemented broad-based categorical eligibility as a mechanism to join SNAP, compared to only two states in 2000; of those forty-one states, thirty-eight elected to eliminate the SNAP liquid asset test as part of broad-based eligibility. The number of states offering call centers, phone applications, and combined application processes with other transfer programs has exploded, along with the number offering simplified reporting and exempting vehicle assets. As of 2011, forty-nine states used simplified reporting, and forty-five states exempted all vehicle assets from resources in determining eligibility for SNAP. At the same time, states pulled back from imposing short recertification windows of one to three months and restored SNAP eligibility to more noncitizens, especially children.
Beyond the macroeconomy and policy changes, there have been important demographic shifts in the U.S. population over the past several decades that could differentially affect the size and composition of the SNAP caseload. On the one hand, the aging of the population suggests that the composition of the caseload should be aging as well. However, because take-up rates among seniors are so much lower than those among adults and children, population aging should put downward pressure on the growth of the caseload; thus it is not clear a priori whether the age distribution of the caseload is likely to change due to population aging. Indeed, because of the decline in marriage the fraction of births to unwed mothers accelerated from 15 percent of live births in 1980 to 40 percent by the mid-2000s (Cancian and Reed 2009; Carlson and England 2011), and, as single-mother families are more likely to be poor, then it is entirely possible that the caseload could be getting larger and younger at the same time.
A similar trend toward a younger, larger caseload could emerge from the growth of the Hispanic population, who, all else being equal, tend to be younger, have lower incomes, and have larger family sizes (Landale, Oropesa, and Bradatan 2006). Another secular trend placing upward pressure on the size of the SNAP caseload is the significant growth of disability, both in the Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) programs (Muller, O'Hara, and Kearney 2006; Autor 2011). Households in which all residents receive SSI automatically qualify for SNAP, but SSDI households and those SSI units where some receive disability and others do not must still meet income and asset restrictions.
Figure 1.3 presents trends in the age composition of households receiving SNAP for children under age eighteen, for adults age eighteen to fifty-nine, and for seniors age sixty and older. The age sixty threshold for seniors is consistent with SNAP policy for eligibility determination. The figure shows that in any given year the participation rate among children is double the rate of adults and triple that of seniors. However, the decline in participation among children and adults during the welfare reform era (1993 to 2000) was substantially higher than among the elderly (46 and 48 percent, respectively, compared to 30 percent), but the subsequent growth from 2000 to 2011 was also higher for those two groups compared to the elderly (95, 138, and 75 percent, respectively). Combined, these changes over the past decade have resulted in a shift in the age composition of households receiving SNAP away from children and elderly and toward adults, as shown in Figure 1.4. In all years prior to the Great Recession about 55 percent of SNAP households consisted of children and the elderly, but by 2009, a slim majority were nonelderly adults.
Coincident with the shift in the age composition of households with SNAP is the shift in the composition toward smaller households and those with multiple generations. Figure 1.5 shows that beginning in the welfare reform era there has been a secular decline in the fraction of SNAP households containing three or more persons and a rise in the fraction of one- and two-person SNAP households. At the same time, households receiving SNAP, like the general population, are increasingly likely to contain multiple generations, as seen in Figure 1.6. A multigeneration household is one that contains two or more adult generations, with or without a grandchild, or a grandparent and grandchild household ("skipped generations"). The upward pressure in multigeneration households stems more from the addition of adults to the household than children, which is consistent with the trend toward more two-person SNAP households.
A possible concern with the shift toward smaller, prime-age adult households is that it may coincide with an increasing fraction of the SNAP caseload headed by individuals out of the labor force. A more welfare-reliant population could affect public support for SNAP in light of the centrality of work requirements and time limits that fundamentally altered the TANF program during welfare reform (Ziliak 2009). In fact, Figure 1.7 shows that the share of SNAP households headed by a person out of the labor force has been very stable for the past two decades, averaging about 53 percent. The growth has been most rapid among full-time, full-year workers, as well as part-time, full-year workers. In other words, the heads of an increasing share of SNAP households have a very strong attachment to the labor force. Furthermore, Figure 1.8 shows that the fraction of SNAP households headed by a high school dropout has plummeted by more than half to under 30 percent since 1980, and by 2011 more than a third of SNAP households were headed by someone with some college or more. Figure 1.9, which depicts the distribution of SNAP households by household income in relation to the federal poverty guideline given the household size, shows that since the mid-1980s the composition of SNAP households has trended toward those with annual incomes above the poverty line. This suggests that SNAP has evolved into a work supplement for educated, near-poor households.
Excerpted from Snap Matters by Judith Bartfeld, Craig Gundersen, Timothy M. Smeeding, James P. Ziliak. Copyright © 2016 Board of Trustees of the Leland Stanford Junior University. Excerpted by permission of STANFORD UNIVERSITY PRESS.
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Table of Contents
Contents and Abstracts
This chapter provides an overview of how SNAP has evolved over the past fifty years and, previewing the findings from the remainder of the volume, discusses the factors that have affected changes in participation over time; the impact of SNAP on poverty, food security, consumption, health, and obesity; and the interplay between SNAP and other public assistance programs. SNAP is highly responsive to macroeconomic pressures as well as policy choices and has become the most effective antipoverty program for nonelderly households. Overall, higher SNAP benefits reduce the risk of food insecurity, SNAP does not appear to contribute to obesity, and limited evidence suggests that SNAP has long-term health benefits. Nonetheless, there remain considerable gaps in the understanding of SNAP's impacts, particularly regarding impacts on nutrition and health. The program differentially serves the most at-risk households, which creates challenges in assessing program impacts.
1Why Are So Many Americans on Food Stamps? The Role of the Economy, Policy, and Demographics
This chapter describes the socioeconomic and policy climate in recent decades that had bearing on SNAP participation and presents a formal empirical analysis of those determinants along with detailed simulations of the relative contributions of the economy, policy, and demographics to changes in SNAP participation over time. The results suggest that SNAP is operating effectively as an automatic fiscal stabilizernearly 50 percent of the increase in participation from 2007 to 2011 was due to the weak economybut policy reforms expanding access and benefit generosity also affected participation, accounting for nearly 30 percent of the increase after the Great Recession. The changing demographics of the American household are helping restrain growth in SNAP.
2The Effect of SNAP on Poverty
This chapter examines the antipoverty effect of SNAP, using survey and administrative data. The analysis shows that SNAP reduced poverty by 16 percent in 2011, after adjusting for underreporting, and produced even greater reductions in the depth and severity of poverty. The program has a particularly strong alleviative effect on poverty among children, who experience significantly higher rates of poverty than the overall population. Recent policies to increase access to SNAP have increased the program's antipoverty efficacy. SNAP significantly improves the welfare of poor families and plays an important role in mitigating the effect of economic downturns on poverty.
3The Supplemental Nutrition Assistance Program and Food Insecurity
This chapter reviews recent theory and empirical evidence regarding the effect of SNAP on food insecurity and replicates the modeling strategies used in the empirical literature. The authors find that recent evidence suggesting an ameliorative effect of SNAP on food insecurity may not be robust to specification choice or data. Most specifications mirror the existing literature in finding a positive association of food insecurity with SNAP participation. Estimates from some specifications that address selection into SNAP participation do show that SNAP reduces food insecurity as do estimates from models that consider the intensity of SNAP participation.
4SNAP and Food Consumption
This chapter describes the relationship between SNAP and food spending. It presents the neoclassical framework for analyzing in-kind transfers such as SNAP, which unambiguously predicts an increase in food spending, and follows with an explanation of the SNAP benefit formula. The chapter then presents new evidence from the Consumer Expenditure Survey on food spending patterns among households overall, SNAP households, and other subgroups of interest. Results show that a substantial fraction of SNAP households spend an amount that is above the program's needs standard and that small families are more likely than large families to spend more on food than the needs standard amount. Actual benefit levels are smaller than the needs standards, and most families spend more on food than their predicted benefit allotment. Because of this, the neoclassical model implies that most families treat their benefits like cash.
5The Health and Nutrition Effects of SNAP: Selection into the Program and a Review of the Literature on Its Effects
This chapter assesses the effects of SNAP on health and nutrition. First, differences between SNAP recipients and nonrecipients are summarized. Using the National Health Interview Survey and the National Health and Nutrition Examination Survey (NHANES), it is established that SNAP recipients are in worse health than are nonrecipients, even on outcomes that may predate SNAP use. Using NHANES, it is shown that SNAP-recipient adults eat a less nutritious diet than do nonrecipients, although SNAP recipient children's nutritional outcomes are not different from those of other children. On average, SNAP recipients are worse off, a fact that complicates evaluation of SNAP's effects. The chapter concludes by reviewing the causal literature about the health and nutrition effects of SNAP.
6SNAP and Obesity
The central goal of SNAP is to alleviate food insecurity. Recently, some have argued that SNAP should also be used to help reduce obesity rates. This chapter begins by showing how, theoretically, the impact of SNAP on obesity is ambiguous. Next, using data from the National Health and Nutrition Examination Survey (NHANES), higher incomes are, in general, associated with lower rates of obesity, implying that that SNAP participation, which increases resources available for food purchases, would lead to reductions in obesity. Consistent with this, the majority of well-done studies find that SNAP participation leads to declines or no change in the probability of obesity for recipients in comparison to eligible nonrecipients. This chapter concludes with cautionary remarks about how some recent proposals to restructure aspects of SNAP to be "antiobesity" are unlikely to have any impact on obesity but would lead to increases in food insecurity.
7SNAP and the School Meal Programs
This chapter examines how SNAP functions as a component of the broader food assistance safety net for school-age children. Variations in SNAP rules across states and over time have important implications for children's access to school meals, because of policy linkages between programs at both institutional and household levels. Using data from the Survey of Income and Program Participation, the chapter reveals considerable variation in the way that children access and package programs, both cross-sectionally and over time. The sequencing of programs is consistent with use of food assistance as part of a managed process for dealing with food needs: Children are far likelier to add programs sequentially than all at once, in ways that are not always consistent with changes in eligibility, and low-income nonparticipants who are food insecure are substantially more likely to begin participating than are their food-secure counterparts.
8Multiple Program Participation and the SNAP Program
This chapter presents evidence on the prevalence of participation in other means-tested transfer programs in combination with SNAP. Evidence from the Survey of Income and Program Participation (SIPP) indicates that receipt of benefits from other traditional transfer programs by SNAP families is common, with 76 percent of those families receiving at least one other major benefit of that type in 2008 to 2009, excluding Medicaid. Over the long term, multiple benefit receipt among SNAP families has fallen, a result of declines in the TANF caseload, which have been larger than increases in the SSI, SSDI, and WIC caseloads. The analysis shows that high marginal tax rates generated by multiple program receipt are relevant for only a small portion of the TANF caseload, namely, the portion of the caseload that is nondisabled, nonelderly, and has earnings in the phase-out regions of the programs where marginal tax rates are high.