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Do Minimum Wage Increases Affect SNAP Benefits?

Author

Listed:
  • Snyder Thomas
  • Rinkevich Senayt
  • Yuan Weici

    (Department of Economics, University of Central Arkansas, 201 Donaghey Ave, Conway, AR72035, USA)

Abstract

The recession of the late 2000s accompanied a steep increase in the number of people on the U.S. federal Supplemental Nutrition Assistance Program (SNAP). The economy recovered, yet the number of people on SNAP remained relatively high. This study investigates whether increases in minimum wages affected the number of SNAP beneficiaries and the per-capita cost of the program. Economic reasoning suggests a minimum wage increase can decrease poverty through higher wages or increase poverty by enacting a barrier to work. Using a panel data set (1997–2015) at the state level, two-way fixed effects estimates demonstrate a nonlinear relationship between minimum wages and SNAP benefits. At low minimum wages, increases in the minimum wage reduce SNAP enrollment and benefits; however, at high minimum wages, increases in the minimum wage increase SNAP enrollment and benefits. Twenty states have already passed the minimum wage turning point. Further increases can lead to more SNAP participants.

Suggested Citation

  • Snyder Thomas & Rinkevich Senayt & Yuan Weici, 2019. "Do Minimum Wage Increases Affect SNAP Benefits?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-6, April.
    • Handle: RePEc:bpj:bejeap:v:19:y:2019:i:2:p:6:n:1
    DOI: 10.1515/bejeap-2018-0045
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    More about this item

    Keywords

    minimum wage; SNAP; welfare expenditure; unemployment;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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