Project:
A County-Level Analysis of Food Stamp Caseload Changes in Tennessee

Year: 2001

Investigator: Tegegne, Fisseha, Safdar Muhammad, Enenfiok Ekanem, and Surendra Singh

Institution: Tennessee State University

Project Contact:
Fisseha Tegegne, Resource Economist

This study examines the factors associated with the decline in the Food Stamp Program (FSP) caseload in Tennessee from 1994 to 1999. Previous studies used State-level data to assess the effect of economic conditions and the 1996 welfare reform legislation on cash welfare and food assistance caseloads. The authors extend this research by focusing on the effect of local labor market conditions on the FSP caseload. They used county-level FSP data obtained from the Tennessee Departments of Human Services and Employment Security as well as data from the Regional Economic Information System.

The authors estimated a regression model, with FSP caseload change as the dependent variable. Their estimation results indicated that the unemployment rate and growth in retail jobs were important determinants of caseload changes. Their finding that a higher unemployment rate is associated with a smaller decline in the caseload suggests that, in times of economic difficulty, people tend to stay in the program rather than leave. This finding is consistent with the general trend of caseload change for the country over the years. The study finds that the growth in retail jobs reduces reduces the FSP caseload because, given their education and skill levels, most food stamp recipients found jobs in the retail sector. In contrast, growth in wage and salary jobs in the primary labor market—where jobs offer relatively high wages, good working conditions, and advancement opportunities—was not associated with a decline in the FSP caseload. The authors suggest that changes in the primary labor market do not affect FSP recipients because they are unlikely to have the qualifications for primary labor market jobs.

The results of the study underscore the importance of focusing on that segment of the local labor market in which recipients find jobs. The authors recommend a focus on job creation in areas where job opportunities are limited. In addition, the authors suggest that the expansion of education and training programs may enable food stamp recipients to access jobs in the primary labor market.