The Food Stamps Program and Economic Security Among Low‐Income Families, Part II: The Effects of Labor and Income

Abstract

This article is the second part of the analysis on this title, the first of which was published in issue 4.4 of this journal. Using a combination of family‐level micro data and state‐level macro indicators, the goal is to examine the roles of the Food Stamps Program (FSP) in promoting economic security during 2004 and 2007. To account for endogeneity and self‐selection bias likely in models of labor supply, income, and poverty using survey data, panel data models are estimated by instrumenting FSP receipts with TANF receipts at the family level and FSP participation rates at a specific geographic level. While substantiating the widely recognized work‐disincentive effects of FSP, results support its income‐enhancing effects on one hand and poverty‐increasing effects on the other. These seemingly contradictory results reaffirm that FSP supports are typically inadequate to make a significant dent in the economic insecurity of poor families even though they help promote economic security among low‐income but non‐poor families.