Working Paper: NBER ID: w23633
Authors: Lorenzo Almada; Ian McCarthy
Abstract: The appropriate size and scope of government nutrition assistance programs is a regular source of debate among policy-makers, and with calls to reduce government benefits, a clear understanding of household responses to any proposed benefit reduction is critical. Exploiting the design of U.S. nutrition assistance programs, we examine how low-income households reallocate their budgets following an exogenous reduction in nutrition assistance benefits. The magnitude of our results suggests that the budget for an average low-income household with children is severely inflexible and likely unable to absorb more than a $2 to $3 reduction in nutrition benefits per child per week.
Keywords: Nutrition Assistance; Household Budgeting; Food Security
JEL Codes: C25; D1; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| reductions in nutrition assistance (I38) | increase in expenditures on food at home (D12) |
| reductions in nutrition assistance (I38) | decrease in expenditures on entertainment and other non-essential goods (D12) |
| increase in expenditures on food at home (D12) | decrease in expenditures on entertainment and other non-essential goods (D12) |
| absence of school meal programs (I32) | increase in expenditures on food at home (D12) |
| absence of school meal programs (I32) | decrease in expenditures on entertainment and other non-essential goods (D12) |