Working Paper: NBER ID: w27796
Authors: Marianne Bitler; Hilary W. Hoynes; Diane Whitmore Schanzenbach
Abstract: The COVID-19 crisis has led to spiking unemployment rates with disproportionate impacts on low-income families. School and child-care center closures have also meant lost free- and reduced-price school meals. Food prices have increased sharply leading to reduced purchasing power for families’ limited income. The Families First Coronavirus Act and the CARES Act included robust responses including expansions to unemployment insurance (expansions in eligibility and $600 per week supplement), a one-time payment of $1,200 per adult and $500 per dependent, an increase in SNAP payments, and the launch of the Pandemic EBT program to replace lost school meals. Despite these efforts, real time data show significant distress – notably food insecurity rates have increased almost three times over the pre-COVID rates and food pantry use has also spiked. In this paper, we explore why there is so much unmet need despite a robust policy response. We provide evidence for three explanations: (1) timing - relief came with a substantial delay (due to overwhelmed UI systems/need to implement new programs); (2) magnitude – payments outside UI are modest; and (3) coverage gaps – access is lower for some groups and other groups are statutorily excluded.
Keywords: COVID-19; social safety net; unemployment insurance; food insecurity; SNAP
JEL Codes: H53; I3; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Timing of relief payments (H84) | Economic distress experienced by families (J12) |
| Magnitude of payments outside UI (J65) | Level of food insecurity and economic distress (I32) |
| Structure of safety net programs (I38) | Levels of unmet need (I31) |