Working Paper: NBER ID: w16198
Authors: Hilary Williamson Hoynes; Diane Whitmore Schanzenbach
Abstract: Labor supply theory makes strong predictions about how the introduction of a social welfare program impacts work effort. Although there is a large literature on the work incentive effects of AFDC and the EITC, relatively little is known about the work incentive effects of the Food Stamp Program and none of the existing literature is based on quasi-experimental methods. We use the cross-county introduction of the program in the 1960s and 1970s to estimate the impact of the program on the extensive and intensive margins of labor supply, earnings, and family cash income. Consistent with theory, we find modest reductions in employment and hours worked when food stamps are introduced. The results are larger for single-parent families.
Keywords: Food Stamp Program; Labor Supply; Public Assistance; Quasi-Experimental Methods
JEL Codes: H31; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Food Stamp Program (FSP) introduction (I38) | labor supply reduction (J20) |
| Food Stamp Program (FSP) introduction (I38) | employment reduction (J63) |
| Food Stamp Program (FSP) introduction (I38) | hours worked reduction (J22) |
| Food Stamp Program (FSP) introduction (I38) | workforce participation reduction (J68) |
| Food Stamp Program (FSP) introduction (I38) | family income impact (E25) |