Points of View

The Future of SNAP

Sam Stebbins

The report referenced in this post can be read here from the American Enterprise Institute.

The American Enterprise Institute (AEI) released a report last month by economist Diane Whitmore Schanzebach titled “The Future of SNAP: Continuing to Balance Protection and Incentives.” The report analyzes whether the Supplemental Nutritional Assistance Program (SNAP), formerly known as the Food Stamp Program, is effective.

 

SNAP Stabilizes the Economy

Whitmore Schanzebach refers to the SNAP program as an “automatic macroeconomic stabilizer.” Families spend SNAP benefits at neighborhood grocery stores and farmer’s markets, stimulating their local economies.

In fact, SNAP was found to have a greater fiscal stimulus impact than “any other potential spending increase or tax cut policy” during the Great Recession. Every $1 in new SNAP benefits generates between $1.24 and $1.79 in economic activity.

 

SNAP Protects Families and Children

SNAP provides economic protection to families and addresses food insecurity. It operates by closing the gap between a family’s income and resources and the minimum budget for food according to the USDA’s “Thrifty Diet Cost.”

Additionally, SNAP has contributed to positive outcomes for the children who receive benefits. Babies whose mothers receive SNAP benefits during their third trimesters of pregnancy are less likely to have low birth weights. Compared to their peers who qualify for but do not participate in SNAP, children who grow up receiving assistance from the program are more likely to graduate high school and have improved health in adulthood. “Instead of SNAP in households with young children being a ‘welfare trap,’” Whitmore Schanzebach explains, “it appears to be the opposite—providing benefits to children at important stages of their development likely allows them to invest in the skills that will help them escape poverty when they grow up.”

Although studies on the negative effects of SNAP on individuals are limited, Whitmore Schanzebach states that evidence suggests work disincentives are “modest.” Studies conducted in the 1960s and ‘70s suggest that of those receiving Food Stamps, married men and single mothers were likely to work fewer hours per week than they would without assistance. Otherwise, unemployment rates are not notably effected.

 

Block Granting SNAP

Block granting the SNAP program would “undermine the program’s stabilizing impact on the macroeconomy,” Whitmore Schanzebach argues. Currently, the program is flexible and able to immediately address economic downturns and unemployment. Block granting SNAP would impede the program’s ability to answer to changes in the economy. 

 

Read more

Make sure to read the whole report from AEI here at their website.