In this research spotlight, a study uses large-scale data to determine whether the SNAP program is a cost-effective investment.
 
The U.S. Food Stamps pilot program was launched by President John F. Kennedy’s executive order in 1961. Four years later, the program, along with the rest of the country’s safety net, was significantly expanded when President Lyndon B. Johnson declared a War on Poverty, with a goal “not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.” Now called the Supplemental Nutrition Assistance Program (SNAP), the program provides low-income individuals — currently, families with incomes below 130 percent of the federal poverty line — with vouchers to purchase groceries. In 2018, households received an average of $252 per month, or about $4 per person per day.
 
SNAP is the second-largest antipoverty program for children (the largest are the refundable tax credits: the Earned Income Tax Credit and the Child Tax Credit). In 2018, it lifted 3.1 million people out of poverty at a cost of $65 billion dollars. A new study by the University of Michigan’s Martha J. Bailey; the University of California, Berkeley’s Hilary W. Hoynes, who is also a Stone Center Affiliated Scholar; Stanford University School of Medicine’s Maya Rossin-Slater; and UC Berkeley’s Reed Walker takes a comprehensive look at whether that cost translates into a cost-effective investment of public funds. Unlike many previous studies, which were limited by small sample sizes or provided only limited evidence of the long-term impacts of SNAP, this study shows how reducing child poverty and investing in children’s nutrition is linked to a broad spectrum of positive economic and health outcomes.
 
The researchers combined data on 43 million Americans from the 2000 Census and the 2001 to 2013 American Community Survey with data from the Social Security Administration’s Numerical Identification System (Numident), and drew on the variation from the county-level roll-out of the Food Stamps program between 1961 and 1975. Using this large-scale data set, the researchers found that children with access to Food Stamps before age five experience benefits in their adult human capital, economic self-sufficiency, and longevity.1 Access before age five was also associated with reductions in adult metabolic syndrome conditions including high blood pressure, diabetes, and heart disease, and, for adult women, improvements in some measures of economic self-sufficiency.2  
 
The researchers also analyzed geographic mobility and neighborhood quality, and found that early childhood access to Food Stamps increased the chances that individuals will leave their counties of birth, own their own homes, and live in a single-family house. “This is consistent with the idea that Food Stamps in early life allows individuals to move to higher quality neighborhoods, as measured by a range of characteristics at the Census tract and county geographies,” the researchers write. “Although the impacts of Food Stamps on adult outcomes appear to operate in part through mobility, we also show long-term benefits for individuals who stay in their counties of birth until adulthood.”
 
However, the researchers found that these long-term economic and health payoffs occurred only when children received food stamp access at a very young age — from in utero through age five. Their study showed no significant long-term impacts of Food Stamp access among children ages six to 18. This suggests that “greater resources for mothers during pregnancy and in her child’s first five years of life are especially critical in shaping adult human capital, health, and productivity,” the researchers write.
 
Taking all of these effects into consideration, this comprehensive study shows that SNAP is a highly cost-effective investment. The researchers estimated a marginal value of public funds — the ratio of the benefit of the policy to its recipients (childhood Food Stamps beneficiaries) to the net cost to the government — and concluded that this value is 56. “We find that childhood exposure to Food Stamps reduces the likelihood that individuals receive income from public programs in adulthood,” they write. “This implies that the social safety net for families with young children may, in part, ‘pay for itself’ by reducing reliance on government support in the long-term.”
 
 
Footnotes:
1 The benefits included an increase of 6 percent of a standard deviation in adult human capital, 3 percent of a standard deviation in adult economic self-sufficiency, and 8 percent of a standard deviation in the quality of adult neighborhoods; a 0.4 percentage-point increase in longevity; and a 0.5 percentage-point decrease in likelihood of being incarcerated.
 
2 This result is from “Long-Run Impacts of Childhood Access to the Safety Net,” by Hoynes, Diane Whitmore Schanzenbach, and Douglas Almond.