Panel Paper: Food Security of SNAP Recipients Worsened As the Real Value of SNAP Benefits Declined From 2009 to 2011

Saturday, November 9, 2013 : 9:45 AM
Boardroom (Ritz Carlton)

*Names in bold indicate Presenter

Mark Nord, US Department of Agriculture
The size of the SNAP benefit is a critical program parameter. Yet estimating the effects of a change in the size of the SNAP benefit on program outcomes is difficult because the benefit is uniform across States and because experimentation is largely precluded by the entitlement character of the program. A natural experiment created by the 2009 increase in SNAP benefits mandated by the American Recovery and Reinvestment Act (ARRA, also known as the "Stimulus"), and the subsequent erosion of about half of that increase by inflation, provides a rare opportunity to estimate those effects. Earlier research documented improvements in food spending and food security from 2008 to 2009 that appeared to have resulted from the ARRA SNAP-benefit increase. This study estimates the extent to which those gains may have been eroded from 2009 to 2011 as a result of the reduction in real value of SNAP benefits due to inflation in food prices. Prior to 2009, SNAP benefits were adjusted each year for food-price inflation, but following the ARRA-mandated increase, benefit levels were to remain fixed in dollar terms until they were exceeded by the standard benefit formula adjusted for inflation.

In the present study, changes in food spending and food security from 2009 to 2011 were compared between households in the Current Population Survey Food Security Supplement that did and did not receive SNAP. The difference-in-difference analyses, which also adjusted for differences in households' income, employment, and other characteristics, suggest that the decline in value of SNAP benefits resulted in an increase in the prevalence of very low food security and a decline in median food spending by SNAP households. The size of these changes relative to the size of the reduction in the inflation-adjusted value of SNAP benefits was consistent with findings from the earlier research on effects of the ARRA SNAP-benefit increase. Taken together, the two studies provide credible estimates of the effects that may be expected from potential future increases or decreases in SNAP benefits.