Monthly Income Variability and Its Consequences: Evidence from SNAP Administrative Data

Research shows that the receipt and timing of income can significantly influence behavior, including risky behaviors and health indicators such as mortality and emergency department visits. These effects have been linked to the timing of income benefits and transfers, such as those provided by the U.S. Supplemental Nutrition Assistance Program (SNAP). We leverage exogenous variation in the monthly date on which individuals receive SNAP benefits, combined with linked individual-level state and federal administrative microdata, to estimate: (1) the causal effects of days since SNAP (income) receipt within a monthly benefit cycle, and (2) the causal effects of the monthly distribution date (income smoothing) on labor market and health outcomes across months. We show that (1) as the days since SNAP distribution increases, work absenteeism increases and labor market participation decreases until just before the next monthly issuance of SNAP benefits, when outcomes begin to improve again. We directly test food insecurity and health as mechanisms for these labor market cycles and show that they also follow the 30-day benefits cycle. Controlling for these 30-day benefit cycles, we then estimate (2) the causal effect of monthly distribution date on labor market participation, health, and food insecurity. We find evidence that if states distributed SNAP in the middle of a calendar month, rather than the beginning or end of a month, SNAP recipient labor market participation would increase, reported disability would decrease, food insecurity would decrease, and the lifespan of SNAP participants—which we capture by linking the universe of Social Security Administration individual death records—would increase by 101 days (0.5%), on average.