Panel Paper: Understanding the Effects of State Safety Net and Labor Policies on Family Economic Stability and Health

Friday, November 3, 2017
Dusable (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Sharon Wolf, University of Pennsylvania and Taryn Morrissey, American University

In the years following the Great Recession, many children lived in households that experienced high levels of income and employment instability, such that instability was nearly a “normative” event (Blinkoff et al., 2015). Policies that aim to help families maintain their basic needs may be critical to shielding families from the negative effects of economic instability, but states vary widely in their safety net policies. Recent public investments in health (e.g., the Affordable Care Act) expanded insurance coverage, but benefits were unevenly implemented across states. Several states have increased minimum wages or Earned Income Tax Credit (EITC) benefits, and states have considerable discretion over the benefit level, eligibility, and enrollment parameters for numerous social welfare programs including the Temporary Assistance for Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), and Medicaid. These policies can provide a base level of resources for families with low or no income, while EITC and minimum wage policies can support employed families experiencing swings in hours or wages. These policies may have differential effects by child age, given that families’ financial struggles ease as children reach kindergarten.

To date, however, little research has examined the effects of public policies on family economic instability, health outcomes, or how these effects vary with different stages of childhood. Exploiting time and state variation in policies aimed to improve economic security, we hypothesize that more generous state policies predict lower levels of economic instability and improved child and parent health and food security. We expect these effects to particularly strong during the early childhood period, a time in which households commonly experience job changes and sharp decreases in income.

We use four datasets to address these questions. First, the 2008 panel of the Survey of Income and Program Participation (SIPP) was collected from 2008 to 2014 by the U.S. Census Bureau. The SIPP collects monthly household economic information, and periodic information on access to parent-reported child and parent health and food security, on a nationally representative sample of households over several years. Second, using state and year identifiers, we merge the SIPP with state-level data on social welfare and economic programs from the UKCPR National Welfare Data, the USDA SNAP Policy Database, and the Kaiser Family Foundation’s State Medicaid data. We consider state EITC rates, TANF benefit levels, SNAP and Medicaid eligibility, and minimum wages. First, we will use descriptive analyses to illuminate families’ patterns of employment and income instability. Second, we use difference-in-difference models that exploit state variation in state policies to examine how a change in state safety net or labor policies affect families’ experiences of economic instability. Finally, we add an interaction to test whether child age moderates associations between state policies and economic instability. Analyses will focus on the subsample of poor and low-income families and will test different measures of income and job instability, further contributing to the field. Findings will highlight effective strategies to improve family economic stability and health.