Effects of the Recovery Act SNAP Benefit Increase on Participation Among Upper Income Households With Earnings

Abstract

There are a variety of factors that may explain the low participation of working families in the Supplemental Nutrition Assistance Program (SNAP). Explanations include the temporary nature of those families' poverty status; the difficulty of accessing the program; household composition factors; lack of awareness about the program; and the low expected benefit. This study hypothesizes that the food stamp benefit increase of 13.6% that occurred in April 2009 under the American Recovery and Reinvestment Act (ARRA) would draw more upper-income households with earnings into the program. Multivariate regression analysis, using Ordinary Least Squares, suggests that the benefit increase had an immediate statistically significant increase of 5 percentage points on the proportion of upper income working households that participate. The significance of the benefit increase lasts two subsequent months before fading. These findings suggest that changes that either increase benefits or reduce costs can have a significant influence on drawing new households into SNAP. Findings from the descriptive analysis also suggest that the policy of categorical eligibility can be further promoted to draw households in the population of interest into the program.