Association for Public Policy Analysis & Management

This study investigates the impact of households altering their financial behavior to qualify for the nutritional safety net programs (i.e., Supplemental Nutritional Assistance Program, SNAP) on the incidence of nutritional diseases. Our study exploits the fact that individuals have the option to modify their financial behavior to deduct medical expenses at age 60 to qualify for SNAP (instead of being subject to a gross income test) and we use a difference-in-differences (DD) model to examine the impact of the SNAP eligibility on the morbidity of nutritionally sensitive diseases. Our primary study population consists of Medical Expenditure Panel Survey (MEPS) respondents aged 56 to 64. For the overall sample, the DD estimates show that SNAP has no impact on nutritional disease morbidity, with an exception for diabetes, where SNAP is associated with a statistically significant 10.4% (P<0.10) decline in the incidence of diabetes. However, when narrower racial subgroups are considered, the results vary widely across race. Whites only report a 9.5% (P<0.05) decline in the incidence of diabetes. On the other hand, blacks report that SNAP is associated with a 9.1% (P<0.10) decline in the incidence of cancer, 29.8% (P<0.01) decline in the incidence of hypertension, and 24.6% (P<0.05) decline in diabetes. These results are significant, as they demonstrate that low-income households exploit changes in the SNAP eligibility rules by altering their financial decision-making (i.e., itemizing deductions) to receive a direct cash-transfer from the government. Moreover, the results demonstrate that the altered financial decision-making leads to the adoption of health promoting behaviors that directly lead to a lower incidence of nutritional disease, and that minorities, blacks in particular, benefit the most from the program, which closes a significant baseline nutritional disease disparity across racial groups.