Evaluating the effect of the 2023 SNAP benefits cliff on program persistence, financial stability, and employment

• In Event: Work and stability in the Safety Net

Abstract

This project aims to quantify the causal effects of reduced Supplemental Nutrition Assistance Program (SNAP, known as CalFresh in California) benefits on participants’ employment and financial outcomes.  As part of a sweeping effort to mitigate the economic impacts of COVID-19, Congress temporarily increased SNAP participants’ benefit levels by authorizing the roll-out of emergency allotments. They were differentially distributed across households; all participants received at least $95 per month by April 2021, but many received much more. Emergency allotments expired in March 2023, resulting in a sudden benefit reduction, or cliff. While several studies have documented increased rates of food insecurity and food insufficiency following the cliff, little is known about its broader effect on household economic well-being. Our team has constructed a novel, individual-level linked dataset that combines quarterly data on SNAP participation, earnings, and consumer credit outcomes for all CalFresh participants for years 2018-2024. Using this dataset, we estimate how the 2023 benefits cliff affected individuals’ program persistence, labor market outcomes (employment and earnings), and credit outcomes (debt, delinquencies, credit scores, and credit utilization). Specifically, we will leverage variation in emergency allotments across households to create treatment groups that experienced differential declines in CalFresh benefits after the cliff. We will use a difference-in-differences design across these groups, measured before and after the cliff, to assess how it impacted their employment and financial trajectories. We will also examine subgroup effects based on participants’ race/ethnicity, gender, household composition, and age.  These findings will provide key insights regarding the role of SNAP benefit levels in financial stability and labor force participation.

Authors

• Erika Brown, University of California, Berkeley
  Non-Presenting Co-Author

• Brett Fischer, University of California, Berkeley
  Presenting Author

• Jesse Rothstein, University of California, Berkeley
  Non-Presenting Co-Author