The Business Cycle's Secondary Effects on the Decision to Participate in the Food Stamps Program

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Abstract/Contents

Abstract: From January 2007 to July 2009, the number of participants in the United States Food Stamps Program (FSP) increased by 38%. Most analyses discussing this large participation increase attribute it to the recession that began in December 2007. However, existing literature has failed to explore how the recession increases participation. Specifically, there is no evidence as to whether the increase was caused entirely by decreases in income and assets or whether there were also secondary effects from changes in information, stigma, and transactions costs. This paper uses Consumer Expenditure Survey data from January 1993 to March 2009 to estimate the extent of these secondary effects. The paper also identifies the percent of the secondary effects that consist of changes in external stigma costs, by recognizing that the introduction of electronic benefit transfer (EBT) substantially decreased FSP external stigma costs. I find that a 1% point increase in the unemployment rate increases participation in FSP through secondary effects by 3.3% points. 87.5% of this effect is due to changes in external stigma costs. Further work is needed to examine the heterogeneity and the decomposition of these secondary effects, and the extent of these secondary effects on other welfare programs.

Type of resource	text
Date created	May 2010

Author	Laird, Jessica A.
Primary advisor	Pistaferri, Luigi
Degree granting institution	Stanford University, Department of Economics

Subject	Stanford Department of Economics
Subject	United States
Subject	Food Stamps Program
Subject	participation
Subject	Consumer Expenditure Survey
Subject	electronic benefit transfer
Genre	Thesis

Location	https://purl.stanford.edu/sp157mn8040

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Preferred Citation: Laird, Jessica A. (2010). The Business Cycle's Secondary Effects on the Decision to Participate in the Food Stamps Program. Stanford Digital Repository. Available at: https://purl.stanford.edu/sp157mn8040

Stanford University, Department of Economics, Honors Theses

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