Project:
Geographic Variation in Food Stamp and Other Assistance Program Participation Rates: Identifying Poverty Pockets in the South

Year: 2004

Investigator: Hoyt, William H., and Frank A. Scott, Jr.

Institution: University of Kentucky

Project Contact:
William H. Hoyt
Department of Economics
335AZ Carol Martin Gatton B& E Building 0034
University of Kentucky
Lexington, KY 40506
Phone: 859-257-2518
E-mail: William.hoyt@uky.edu

Temporary Assistance to Needy Families (TANF) rolls declined dramatically following the 1996 welfare reforms, while Supplemental Security Income (SSI) enrollment increased slightly. Since Food Stamp participation rates are considerably lower among SSI recipients than among TANF recipients, Food Stamp Program (FSP) enrollment was significantly affected by welfare reform even though it was not directly targeted by the legislation. Understanding changes in FSP participation benefits from a simultaneous analysis of participation in TANF and SSI.

Food stamp participation declined in the late 1990s along with TANF participation, although by a smaller magnitude. Given that the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 for welfare reform made minimal adjustments in the FSP compared to changes in welfare programs, the reductions in FSP participation may seem puzzling. As a result of the observed reductions in participation in both programs, evaluating the link between TANF participation and FSP participation may help explain why FSP participation declined so sharply during this period.

This project directly examines the FSP-TANF participation link and the FSP-SSI participation link, using county-level participation data in these three programs. The study included a sample of states throughout the United States and all the Southern States. The model controlled for demographic, economic, and program characteristics most likely to affect both eligibility and participation. Study results indicate that a strong relationship exists between the level of FSP participation and both TANF and SSI participation. The results indicate that FSP-TANF link in 2001 appears stronger than the link between Assistance to Families with Dependent Children (AFDC) participation and FSP participation in 1995.

Results also show that FSP participation responds to the different options states now have as a result of welfare reform. States have greater flexibility to tailor welfare benefits, within parameters defined by Federal regulation, creating cross-State differences in how income, resources, eligibility, and assets are calculated to determine FSP eligibility. This study finds that county administration has a negative impact on FSP participation, while State administration has a positive impact. Exempting child support from income and expanded categorical eligibility each increase FSP participation. State-required training and employment appear to have a significant negative impact on FSP participation, particularly in the Southern States. One- Stop Centers—multiple agencies co-located to provide services—appear to have little impact on participation, at least in the South. The longer the certification period, the higher the FSP participation rate appears.

The study examined the change in FSP participation, both in absolute terms (change in the number recipients per 1,000 residents) and percentage terms, while controlling for the levels and changes in both TANF and SSI participation. Absolute changes in FSP participation between 1995 and 2001 are generally negatively related to the levels of both AFDC and SSI participation in 1995. However, changes in FSP participation are positively related to changes in AFDC/TANF participation, suggesting that counties with large reductions in welfare case loads have large reductions in FSP caseloads as well. This result, however, is not robust. When the change in FSP participation is measured as a percentage change, larger percentage reductions in welfare participation result in smaller percentage reductions in FSP participation. One interpretation may be that FSP and welfare benefits might serve as substitute benefits rather than complementary benefits.