The Impact of Pandemic Financial Support for Households With Children on Food Insecurity and Financial Well-Being

• In Event: Understanding Food and Transportation Security and Policies to Address Them

Abstract

To maintain the economic security of low-income households with children during the pandemic, in 2021 the US federal government expanded several programs providing financial assistance to these households. This included making the federal child tax credit (CTC) fully refundable, increasing the amount by up to $1600 per child, and advancing half of the total amount in monthly payments. Simultaneous changes to SNAP Emergency Allotments (EA) increased benefits for SNAP recipients. However, some states began suspending these benefits early. Within this environment, states also made decisions to provide Pandemic-EBT benefits to households in the school meals program among other changes.

This research quantifies the relative magnitude of transfers from different sources during the pandemic. While past research has examined the impacts of SNAP EA and advanced CTC payments, this study will take a closer look at how these transfers compared and interacted. In particular, it focuses on the impacts from both policies on household food insecurity and financial well-being. It also examines how the impacts of the transfers differ for households with limited access to savings or credit.

Using the Survey of Income and Program Participation (SIPP) and federal and state policy rules, I impute amounts for SNAP, SNAP EA, advanced CTC, and Pandemic-EBT in addition to other transfers these households received. I start by descriptively comparing how the annual transfers of these benefits compare for households with different characteristics. I then exploit variation in the benefit amounts provided by SNAP EA and the federal CTC to test how different transfer amounts impact food insecurity and financial well-being. This relies on differences in the total amount of CTC payments for young children and the suspension of SNAP EA benefits in eight states in the middle of 2021. Using a difference-in-differences framework, I test how these exogenous changes to the magnitude of financial transfers a household received affected their food insecurity and financial well-being.

I find that average transfers from each source vary substantially and that the relative magnitude coming from each source is dependent on household characteristics in ways that can sometimes offset. For example, while the average household with young children received a greater amount in advanced CTC payments than households with older children, they also received lower Pandemic-EBT payments .

Preliminary results indicate that SNAP EA payments and advanced CTC payments both improved household financial well-being and reduced the likelihood that a household experienced food insecurity during the year. These results apply particularly for low-income households, with the advanced CTC amounts having no impact on the outcomes for middle-income households. I find the strongest impacts specifically for SNAP-eligible households who benefited from both the advanced CTC payments and SNAP EA benefits for the full year. Impacts were also stronger for households with limited access to credit or savings.

The 2021 CTC expansion is linked to historical a historical reduction child poverty. This research adds greater context about the overall policy landscape. It also provides better evidence into how policies addressing food security and financial well-being interact.

Author

• Jack Kroger, RAND School of Public Policy
  Presenting Author