Panel Paper: Financial Behaviors, Financial Hardships, and Food Insecurity Among Households With Elementary School Children

Friday, November 8, 2013 : 1:35 PM
DuPont Ballroom H (Washington Marriott)

*Names in bold indicate Presenter

Judi Bartfeld, University of Wisconsin, Madison and J. Michael Collins, University of Wisconsin
Although low income is among the strongest predictors of food insecurity, poverty and food insecurity are distinct phenomena. More than half of poor households with children are not considered food insecure, and more than half of food insecure households with children are not poor.  There remain important unanswered questions about why households with seemingly similar economic circumstances differ in their ability to meet food-related needs, as well as questions about how food secure and insecure households differ in the kinds of strategies they use to cope with financial strain.  

This paper examines the causes and correlates of food insecurity, focusing specifically on financial circumstances and behaviors.  We address three related questions:  First, to what extent are financial shocks—including income shocks as well as expenditure shocks-- predictive of food insecurity?  Second, to what extent do household financial behaviors—including, for instance, use of both traditional and alternative financial services as well as informal financial coping strategies—differ among households with varying levels of food (in)security?  Finally, to what extent is food insecurity associated with broader evidence of household financial distress?  Existing data have limited potential to address these issues, largely due to lack of datasets that jointly assess food security, financial behaviors, financial stressors, and broader indicators of financial strain.  Thus, we use primary data collected through self-administered surveys of parents of elementary school children in low-income communities in Wisconsin. Data collection is underway, with a target sample size of 2500 households.  Data are being collected on behalf of the University of Kentucky’s Child Hunger Research Program.

Preliminary analyses reveal strong negative associations between both income shocks (e.g. job loss, large unexpected drops in income, sustained unemployment) and expenditure shocks (large medical expenses, other large unexpected expenses) and food security, among households of similar income levels.  Likewise, we find very large associations between both use of alternative financial services (e.g. payday lenders, pawn shops) and informal financial coping strategies (e.g. borrowing from friends/family to meet household expenses or emergencies, moving to a home that is easier to afford, working overtime to make ends meet ) and food insecurity.  Finally, our initial analyses suggest that food insecurity is strongly correlated with broader indicators of financial strain ranging from falling behind on rent/mortgage and utilities, to paying late fees on bills, to high levels of perceived difficulty in meeting expenses.

We focus largely on descriptive vs causal associations.  Results will provide insight into the financial circumstances and behaviors of food insecure households, including how they are similar and different from other households at comparable income levels. The ways in which low-income families interact with both traditional and alternative financial services, and more broadly the ways they cope with both financial and food-related hardships, is of considerable interest to policymakers, and we expect our results to shed new light on this area of emerging interest.