Social Assistance Programs and Outcomes: Food Assistance in the Context of Welfare Reform

Food assistance programs play an important role in meeting the basic needs of low-income households. We consider the complex interactions among food stamps, labor force participation, and food insecurity status of low-income households under different program designs and economic conditions. The analysis uses data from the Survey of Program Dynamics to jointly estimate the role of participation in the Food Stamp Program (FSP), labor market participation and well-being, measured as food security, through the use of a simultaneous equation model. The results of our research suggest that food insecurity has a positive effect on FSP participation while labor force participation reduces FSP participation. Furthermore, FSP participation is more responsive to changes in the program benefits than to changes in nonlabor income. The linkages among food program participation, labor force participation, and well-being, measured in terms of food insecurity, are complex. The structural approach provides evidence that, among low-income households, program parameters affect FSP participation but no evidence that the food assistance reduces food insecurity.