Project:
Food Stamp Program Participation Dynamics in U.S. Counties and States

Year: 2002

Research Center: Joint Center for Poverty Research, University of Chicago and Northwestern University

Investigator: Goetz, Stephan J., Anil Rupasingha, and Julie N. Zimmerman

Institution: Pennsylvania State University

Project Contact:
Stephan J. Goetz
The Pennsylvania State University
The Northeast Regional Center for Rural Development
Department of Agricultural Economics and Rural Sociology
7E Armsby Building
University Park, PA 16802-5602
Phone: 814-863-4656
sgoetz@psu.edu

The Food Stamp Program (FSP) and cash assistance caseloads have fallen dramatically since the mid- 1990s, and the rate of caseload decline differs across States and counties. Prior research on cash assistance and FSP caseload declines focused on the effect of macroeconomic changes, such as changes in State-level unemployment rates. This study examined the factors associated with caseload declines, accounting for economic conditions and demographic characteristics at the county level, and for employment conditions in the labor markets that are most likely to employ former welfare recipients.

In their analysis, the authors used county-level data on economic conditions, which provided more reliable information than State-level data about the employment prospects of former welfare recipients. In addition, they accounted for employment conditions in the foodservice and retail sectors, in which former welfare recipients are most likely to find jobs.

The authors used estimation techniques that accounted for the spatial clusters of program participation, as well as the direct effect that welfare reform has on labor market conditions. The authors found that higher county-level earnings per capita were associated with a more rapid decline in per capita FSP spending between 1995 and 1999, while county-level retail employment growth did not appear to have an effect on the decline in spending. Reductions in food stamp payments per capita were lower in rural counties than in suburban counties. In counties with proportionally more foreign-born and African-American residents, per capita FSP spending fell more quickly. In counties with proportionally more single female-headed households, per capita FSP spending fell more slowly. A greater number of vehicles per household and more bus services per person in a county were associated with a more rapid decline in FSP spending.

The study results suggest that both individual- and community-level factors play a role in explaining changes in FSP participation over time. Further, the way that community-level factors are measured is critical, as is controlling for the spatial clustering of program participation. Finally, per capita FSP spending falls less rapidly in rural counties than in suburban counties, suggesting a systematic difference in the processes that affect food stamp use in rural and suburban counties. The authors noted that the study findings can be used in forecasting fiscal outlays as economic conditions change and measuring the effectiveness of the FSP.