The Dynamics of Food Stamp Program Participation: A Lagged Dependent Variable Approach

This paper investigates the existence of Food Stamp Program (FSP) participation state dependence and its sources in by analyzing the dynamics of participation in the FSP using a lagged dependent variable approach. Results show that FSP receipt in the previous year is an important determinant of current FSP receipt. However, estimated persistence rates declined significantly after 1996, suggesting that long-term FSP dependency was reduced following broader welfare reform measures. The source of FSP state dependence among low-income households is mostly structural implying that a welfare trap does exist.