Implications of income uncertainty for socially efficient redistribution are examined. Counterintuitively, a policymaker may respond optimally to a negative utility shock in the economy by redistributing income away from those who suffered the shock. In particular, it may be welfare enhancing to...

We use a dynamic model of food stamp caseloads with state-level panel data to estimate the impact of the business cycle on food stamp caseloads in the era of welfare reform. The macroeconomy has a substantial impact on food stamp caseloads: A one-percentage-point increase in the unemployment...