Information Shocks and Program Participation: WIC and Welfare Reform
Research Center: Southern Rural Development Center, Mississippi State University
Investigator: Figlio, David, Sarah Hamersma, and Jeffrey Roth
Institution: University of Florida
University of Florida
P.O. Box 117140
Gainesville, FL 32611
This study explores the effects of neighborhood social networks on the degree to which immigrant prenatal Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) participation reacted to the “information shock” period surrounding welfare reform. Detailed natality and program participation records for all Florida births in a 6-year period surrounding welfare reform are used to identify a role of social networks that is not likely to be confounded with local implementation of public programs. The analysis concentrates exclusively on a set of Hispanic immigrants who were eligible to receive WIC during pregnancy, as evidenced by the fact that their birth was funded by Medicaid. The study compares changes in WIC participation among Hispanic immigrants living in neighborhoods with a larger concentration of immigrants from their country of origin to those with a smaller concentration of immigrants from their country of origin, holding constant the size of the immigrant population and the share of immigrants in the neighborhood who are Hispanic. Florida is a unique place to study these effects, because there are large populations of young women who were born in Cuba, Mexico and Puerto Rico, and individuals from these countries live in a variety of both immigrant-dense and immigrant-scarce neighborhoods. By controlling directly for the interaction between time and the size of the Hispanic population in the neighborhood, the effect of own-origin concentration is distinguished from the role of language or the treatment of Hispanic immigrants in local policy implementation surrounding welfare reform. This identification strategy provides the opportunity to separate the effects of the density of an individual’s social network from the effects of the ethnicity of that network during an information shock.
The study uses a model of individual WIC participation that allows immigrant status, country of origin, and general immigrant and Hispanic concentration to influence program participation distinctly from the density of immigrants from a particular country. This model includes mother-specific variables (maternal age, education level, and country of origin) as well as three immigrant-related variables: the neighborhood (ZIP Code) percentage of births to immigrant women, the neighborhood percentage of births to Hispanic immigrant women, and the neighborhood percentage of births to immigrants from the mother’s home country. The question of interest is whether participation behavior during the welfare-reform period reflects any particular benefits to having immigrants from one’s country of origin nearby during an information shock. To answer this question, key coefficients are allowed to vary by quarter between January 1994 and December 1999. The coefficients of interest are the estimated relationships between the fraction of own-origin women in the neighborhood and a mother's WIC participation during pregnancy, holding constant the immigrant concentration and Hispanic immigrant concentration in the neighborhood, at different points in time.
The effect of the density of own-origin immigrants, estimated for each quarter, shows a clear, systematic trend. The quarterly coefficients on the own-origin variable are not statistically different from the initial period (first quarter of 1994) in any of the quarters in 1994, 1995, 1998, and 1999. However, during the period of time in which welfare reform was commencing in Florida – births during 1996 and the first part of 1997 – Hispanic WIC-eligible women living in neighborhoods with relatively more immigrants from their own country of origin were significantly more likely to participate in WIC during pregnancy than were similar women with fewer neighbors from their country of origin. These differences are meaningful in magnitude as well: if a woman lived in a neighborhood that was 100 percent own-origin immigrants, she would be about 35 percentage points more likely to participate in WIC than if she lived in a neighborhood with no own-origin immigrants, holding constant the percentage of immigrants (and Hispanic immigrants) in the neighborhood. Considering a more modest increase of one standard deviation in percentage own-origin immigrants, this suggests an increase in the likelihood of prenatal WIC participation of about 6 percentage points during the welfare-reform period. This positive effect of a social network helps offset the overall negative estimated effect of living in an immigrant-dense neighborhood.
Immigrant women might be particularly reliant on social information channels when the pregnancy is their first, so an analysis limited to first births was also conducted. The estimated effects of having a larger fraction of women in the neighborhood who were themselves immigrants from the same country are substantially larger when restricting the study population to first births. There are also larger effects for less educated and younger mothers when the size of the effect is allowed to vary along these dimensions. Overall, the findings for these subgroups suggest that having a higher percentage own-origin in one's neighborhood is particularly important for people who might be less experienced or more sensitive to information shocks.
This study also provides evidence on the effect of having a nearby WIC office during an information shock. There is never a statistically significant estimated effect of WIC office proximity during the critical time period, and when the WIC office proximity interactions are substantial in magnitude, they have a negative sign. This possibly indicates that having a WIC office nearby might have reduced WIC take-up in this population during the information shock time period. On the other hand, the estimated social network effects remain robust to the inclusion of the WIC office-time interactions. While these results are not conclusive, they provide additional evidence that program office proximity is not a substitute for social networks during information shocks.
This study provides new evidence suggesting that social networks provide information that might help to reduce confusion during information shocks. While the researchers are still working on some data issues, the unique dataset and empirical methodology rule out local program implementation factors, ethnic background itself, or shared language as explanations for why program participation is higher in communities where social networks are likely to be stronger. The results suggest that strategically-located program offices may be successful in spurring program participation but perhaps only if key individuals in the surrounding community are made aware of the eligibility rules for services the program office provides. While the mechanisms through which these enhanced information flows might operate are unknown, this is certainly a topic for future experimentation and study. Nonetheless, this new evidence on the potential role of social networks suggests that using social networks to spread information about eligibility rules and benefits may be successful in reducing the likelihood of major reductions in program participation in periods of information shocks.