Working Paper: NBER ID: w29384
Authors: Jessie Handbury; Sarah Moshary
Abstract: We study the private market response to the National School Lunch Program, documenting economically meaningful spillovers to non-recipients. We focus on the Community Eligibility Provision (CEP), an expansion of the lunch program under the 2010 Healthy, Hunger-Free Kids Act. Under the CEP, participating schools offer free lunch to all students. We leverage both the staggered roll-out and eligibility criterion for the CEP, which is limited to schools where at least 40% of students participate in other means-tested welfare programs. We find that local adoption of the CEP causes households with children to reduce their grocery purchases, leading to a 10% decline in grocery sales at large retail chains. Retailers respond with chain-level price adjustments: chains with the most exposure lower prices by 2.5% across all outlets in the years following adoption, so that the program's welfare benefits propagate spatially. Using a stylized model of grocery demand, we estimate that, by 2016, the indirect benefit had reduced grocery costs for the median household by approximately 4.5%.
Keywords: No keywords provided
JEL Codes: H42; I38; L11; R32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| local adoption of the CEP (F15) | reduction in grocery purchases (D19) |
| reduction in grocery purchases (D19) | decline in grocery sales at large retail chains (L81) |
| local adoption of the CEP (F15) | adjustment of prices by retailers (L11) |
| adjustment of prices by retailers (L11) | reduction in grocery costs for the median household (D19) |