Over the past 15 years, the size of the total Food Stamp Program (FSP)
caseload has varied widely. The number of FSP participants rose by 47
percent in the early 1990s, peaking in 1994 at 27.9 million. The caseload
dropped 39 percent between 1994 and mid-2000 to 16.9 million participants.
Since then, it has again risen sharply. In July 2004, the end of the
period examined in the study, the total number of FSP participants stood at
24.4 million. Three factors are of special interest in understanding this path
of the caseload: the economy, cash assistance policies, and FSP policies.
During the study period, economic conditions varied widely, and the social
safety net was significantly redesigned. The unemployment rate peaked in
the early 1990s and declined until mid-2000. It rose through 2003 and fell
once again. Major changes to State welfare programs were intended to
encourage work and increase welfare exit rates. The changes culminated in
passage of the Federal Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA) in 1996, which replaced Aid to Families
with Dependent Children (AFDC) with the Temporary Assistance for Needy
Families (TANF) program. The changes were also aimed at retaining and
even strengthening other components of the social safety net—the Earned
Income Tax Credit, Medicaid, and food stamps—for parents with children
who complied with TANF program requirements but who were unable to
achieve self-sufficiency through their own earnings.
However, a sharp FSP caseload decline during the same period as the welfare
reforms of the mid-1990s led to concern that changes to State cash assistance
programs embodied in their TANF plans were also disconnecting eligible
recipients from other means-tested programs. In response to such concerns,
legislation, including the Farm Security and Rural Investment Act of 2002,
gave States opportunities to implement policies aimed at easing the burden of
certifying and recertifying for food stamp benefits on families who were
leaving cash assistance or who were combining cash assistance with earnings.
Monthly semiannual administrative data that report State FSP caseloads
are used in the study. The analysis estimates the effects of FSP policies,
welfare policies, and the economy on total FSP caseload and on two components
of it: the portion combining cash assistance and food stamps and the
portion receiving only food stamps.
Results show that welfare reform had a large negative impact on total
FSP caseload. Findings indicate that if no State had implemented a waiver
to its AFDC program and no State had implemented TANF, the total FSP
caseload decline from January 1994 to July 2000 would have been 12.5
percentage points less than the actual 39-percent decline. In other words, the
caseload would have declined only two-thirds as much as it actually did. On
the other hand, if no State had implemented policies aimed at reducing the
stigma and burden of benefit receipt, the caseload would have increased
13.7 percentage points less than the actual 44.5-percent increase from July
2000 through the end of the study data in July 2004. Therefore, these policies
improved access to the FSP.
In the case of the economy, simulations indicate that, if the economy had
never improved over the course of the 1990s, total FSP caseload would have
declined only 13.4 percent instead of the actual 39-percent decline from
January 1994 to July 2000. Had the economy not deteriorated in the early
2000s, total FSP caseload would have increased by 33.8 percent, a somewhat
smaller increase than the observed 44.5 percent.
In summary, the analysis indicates that the improving economy, combined with
implementation of TANF, explains the entire FSP caseload decline in the
mid-1990s, while the weakening economy and policies aimed at increasing
access to the FSP explain half of the increase in the 2000s. While the
economy is twice as important as TANF implementation in explaining the
drop in total caseload in the 1990s, FSP policy changes aimed at increasing
access to the program among eligible families are somewhat more important
than the economy in explaining the rise in the early 2000s. In addition,
while the study does not find consistent effects of policies in the two
portions of the caseload it examines separately (those combining cash assistance
and food stamps and those receiving food stamps alone), the economy
played a large role in the paths of both of the caseloads over the period.