Working Paper: NBER ID: w31518
Authors: Erik A. Hembre; Robert A. Moffitt; James P. Ziliak
Abstract: The federal government enacted massive spending in the Pandemic Recession. But was this spending scaled to the magnitude of the economic downturn? We examine the responsiveness of the safety net to the Pandemic Recession and compare it to that in the Great Recession. Using monthly state-level administrative caseload data from five large transfer programs–SNAP, TANF, Medicaid, SSI, and UI–and measuring responsiveness in the conventional way as the state-level caseload response to cross-state variation in measures of the business cycle–we find that the safety net response during the Pandemic Recession was greater than occurred during the Great Recession for the most important recessionary-relief programs–UI and SNAP. But we find that the two smaller programs, TANF and SSI, were less responsive during the Pandemic, and we find that Medicaid caseloads are generally unresponsive to the business cycle. We also consider the role of Pandemic state-level policies, such as school and business closures, on caseloads, finding that states with more strict government Pandemic policies had greater caseload increases.
Keywords: safety net; pandemic recession; unemployment insurance; SNAP; TANF; SSI; Medicaid
JEL Codes: H75; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Unemployment Insurance (UI) response (J65) | UI caseloads increase during pandemic recession (J65) |
| Supplemental Nutrition Assistance Program (SNAP) response (I38) | SNAP caseloads increase during pandemic recession (H53) |
| Every percentage point increase in unemployment (F66) | UI caseloads increase more during pandemic than Great Recession (J65) |
| TANF response during pandemic (H84) | TANF caseloads less responsive compared to Great Recession (H53) |
| SSI response during pandemic (I14) | SSI caseloads less responsive compared to Great Recession (J65) |
| State-level policies (H79) | caseload responses of safety net programs (I38) |
| Medicaid response (I18) | Medicaid caseloads unresponsive to business cycle (I18) |