Unemployment benefits, food insecurity, and supplemental nutrition assistance program spending

Abstract

This paper examines the effects of unemployment insurance (UI) expansions on household food insecurity in the United States using the Food Security Supplement to the Current Population Survey for 1999-2017. We exploit the plausibly exogenous variation in state maximum weekly UI benefits across states and over time. The two-part model demonstrates that a $100 increase in state weekly UI benefits reduces the likelihood of food insecurity among UI-eligible families by 5.6% and the severity of food insecurity conditional on being food insecure by 6.3%. We further present strong evidence of program substitution between UI and the Supplemental Nutrition Assistance Program (SNAP), which is the largest food assistance program with the stated goal of reducing food insecurity. Specifically, for every dollar spent on UI, 4-11 cents can be saved on SNAP, thereby reinforcing the social benefits of an UI expansion.

The distributional impact of SNAP on dietary quality

“…estimate the causal effects of maximum UI benefits on job search (Krueger & Mueller, 2010), academic achievements (Regmi, 2018), cigarette smoking (Fu & Liu, 2019), health conditions (Kuka, 2020), and, most similar to ours, SNAP participation (Fu et al, 2023). 7 Similarly, SNAP outreach spendings are set by state Departments of Agriculture and should be uncorrelated with individual characteristics in general.…”

“…Thus, it can be viewed as exogenous if we control for the possibly related household and state characteristics. Various recent studies have used a similar identification strategy to estimate the causal effects of maximum UI benefits on job search (Krueger & Mueller, 2010), academic achievements (Regmi, 2018), cigarette smoking (Fu & Liu, 2019), health conditions (Kuka, 2020), and, most similar to ours, SNAP participation (Fu et al., 2023).…”

“…Specifically, we use the state's maximum weekly UI benefits as an instrument for SNAP participation. This identification strategy has been used to analyze the effects of UI expansions on SNAP participation in the United States (Fu et al., 2023). UI is a joint federal‐state program that provides cash benefits to eligible workers who are unemployed through no fault of their own.…”