Panel Paper: New Evidence on Labor Supply and SNAP: What Are Roles of Work Requirements, Expanded Eligibility, and New Program Rules?

Saturday, November 5, 2016 : 4:30 PM
Oak Lawn (Washington Hilton)

*Names in bold indicate Presenter

Brian Stacy, Erik Scherpf and Young Jo, U.S. Department of Agriculture

This paper offers new evidence on the effects of the Supplemental Nutrition Assistance Program (SNAP) on labor supply decisions.  Since the passage of welfare reform in the mid-1990s and continuing through the 2000s, there have been substantial changes made to the SNAP program including work requirements for able bodied adults without dependents (ABAWDs), eligibility requirements, and changes in administrative rules.  These changes have impacted both the total number of SNAP caseloads and the labor supply incentives faced by SNAP enrollees.  There also has been a notable decrease in labor force participation and hours worked since the mid-1990s, leading some to question whether changes in the SNAP program might have been a main driver behind the trends.  This paper examines the impact of SNAP enrollment on labor supply in terms of labor force participation and hours worked.  Our preferred estimates, based on an endogenous switching regression estimator using quasi-experimental variation based on policy changes at the state level, find that SNAP enrollment has a null to in some cases positive impact on labor supply for enrollees.  Our estimates indicate that SNAP participation increases labor force participation by roughly 5 percentage points and yearly hours worked by roughly 47 hours.  We present evidence that the positive treatment effect is likely driven by work requirements imposed on ABAWDs, who have much larger, positive treatment effect estimates.

Full Paper: