Panel Paper: Understanding Food Insecurity During the Great Recession

Friday, November 9, 2012 : 8:40 AM
McKeldon (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Kristin Butcher, Wellesley College, Patricia Anderson, Dartmouth College, Hillary Hoynes, University of California, Davis and Diane Schanzenbach, Northwestern University

Understanding how recessions, and the programs meant to buffer against them, affect childhood hunger is critical to ensuring that poor children are able to build the human capital that will give them an opportunity for success later in life. Food insecurity rates have closely tracked poverty rates in the United States in recent years, and both have trended up since 2000.  With the onset of the recession in 2008, however, food insecurity rates spiked and are far above the level predicted by the poverty rate.  In 2007, 11 percent of households were deemed food insecure, and by 2008 that had climbed to over 14 percent, and is higher than the percent of households in poverty. The Great Recession appears to have changed the relationship between poverty and the risk of hunger in the United States.

Our study provides a comprehensive profile of families with food insecurity and tests three hypotheses for why the Great Recession has produced such high food insecurity.  First, motivated by the historic rise in unemployment, we investigate whether during the Great Recession, becoming unemployed makes one more likely to become food insecure than it did in the past.  There are important reasons to expect that unemployment may be more closely tied to food insecurity in the current era than in previous years, including a shift from cash welfare to in work supports (EITC). If employment collapses, as it has in the Great Recession, then the EITC is unlikely to be effective at supporting low-income families.

Another major change during the Great Recession is that access to credit has diminished.  Not only are households members more likely to be unemployed, but the unprecedented slide in housing values has meant that households can no longer borrow against equity in their homes to smooth consumption against shocks to income.  A second hypothesis to be tested is whether the home ownership status of food insecure families has changed during this recession.  If so, we can gain insight into the role of the housing market collapse in the spike in food insecurity rates. 

Finally, high food prices may play a role in the high rates of food insecurity. Typically during a recession, food prices fall.  However, although core inflation, which excludes energy and food due to their volatility, has been low during this recession, food prices have tended to be high.  A third specific hypothesis to be tested is whether the types of food purchased during the Great Recession have changed. 

These results can be used to improve our ability to target assistance toward those most in need and enable policy to more effectively ameliorate the adverse consequences of the Great Recession.