PRB

Each year, the social safety net lifts tens of millions of Americans out of poverty,¹ helping individuals and families meet their immediate needs for food, housing, health care, and other resources. Safety net programs also may be effective at preventing poverty in the future, according to a new study of the Supplemental Nutrition Assistance Program (SNAP), or food stamps.²

Using data on more than 17 million Americans born between 1950 and 1980, Martha Bailey from the University of California Los Angeles and colleagues from Stanford University and the University of California Berkeley found that access to food stamps from conception through age 5 is associated with improvements across a range of educational, economic, social, and health outcomes in adulthood.

For each government dollar spent on SNAP payments, the lifetime value to participating children is substantial: $62.25. That value reflects expected increases in earnings and life expectancy as well as reductions in incarceration and changes in government tax revenue, over a child’s lifespan.

“Credible and comprehensive estimates of the program’s long-term impacts are essential for informing cost-benefit calculations that may influence budgetary decisions,” the researchers write.

Lifelong Gains Can Be Traced to SNAP Access in Early Childhood

The study takes advantage of food stamps’ staggered rollout between 1961 and 1975 to measure the effects on children conceived after SNAP was implemented in their county. Bailey and colleagues linked data from the U.S. Census Bureau’s Decennial Census (2000 long form) and American Community Survey (2001 to 2013) with county of birth and birth/death dates from the Social Security Administration’s Numerical Identification System files. The researchers constructed a composite index of adult well-being from four subindices:

• Productivity and Human Capital Index, composed of six outcomes related to number of years of schooling, educational attainment, and having a professional occupation.
• Economic Self-Sufficiency Index, composed of 11 indicators of labor force participation, earnings, poverty status, and public assistance income.
• Neighborhood Quality Index, composed of 13 measures of individual and neighborhood income/poverty, household structure, housing tenure, home value, rents, upward mobility, and teen pregnancy rates.
• Physical Ability and Health Index, composed of six indicators of physical, cognitive, and other disabilities or functional limitations.

Additionally, they estimated:

• The percentage of adults not incarcerated (measured as those not in institutional group quarters).
• The percentage of adults surviving to the year 2012. 

Children with access to SNAP throughout early life fared better as adults than their peers in terms of overall well-being, across three of the four adult well-being subindices, and on more than a dozen specific indicators—results that held after controlling for other anti-poverty programs and safety net spending, as well as for county population, employment, income, adult and child mortality, and other factors. These included improvements in:

• Productivity and Human Capital Index
  • Number of years of schooling
  • Likelihood of completing some college
• Economic Self-Sufficiency Index
  • Labor income
  • Likelihood of not being in poverty
• Neighborhood Quality Index
  • Likelihood of home ownership
• Likelihood of not being incarcerated
• Likelihood of surviving to 2012

Bailey and colleagues’ results show little impact of full SNAP exposure on physical disability. They also found that access to food stamps beyond age 5 did not significantly affect adult outcomes.

The Value of Food Stamps Adds Up

An analysis of the long-term benefits that SNAP provides to its recipients suggests the program is highly cost-effective. The research team estimated the program’s “marginal value of public funds,” or the ratio of recipient benefits to net government costs. They found that beneficiaries gained $62.25 per $1 of SNAP payments (see table).

Table. SNAP’s Marginal Value of Public Funds 

*Additional years of life were calculated from the measure of survival to 2012.

For the government, increased tax revenue on children’s long-term earnings (+$.0.07 per $1 in SNAP expenditure) and savings on incarceration costs (+$0.09) were offset by reduced tax revenue associated with a decline in labor earnings among adults (-$0.16).

From a public finance perspective, SNAP and other safety net programs can be viewed in terms of investments whose value only materializes fully over a lifetime. As a result, their success is perhaps better judged, the researchers argue, not on short-term poverty trends but on potential long-term benefits. “If these programs improve adult economic well-being, thus generating both private returns and public benefits, the social safety net system may partially pay for itself,” they conclude.