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Work Incentives and the Food Stamp Program

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  • Hilary Williamson Hoynes
  • Diane Whitmore Schanzenbach

Abstract

Labor supply theory makes strong predictions about how the introduction of a social welfare program impacts work effort. Although there is a large literature on the work incentive effects of AFDC and the EITC, relatively little is known about the work incentive effects of the Food Stamp Program and none of the existing literature is based on quasi-experimental methods. We use the cross-county introduction of the program in the 1960s and 1970s to estimate the impact of the program on the extensive and intensive margins of labor supply, earnings, and family cash income. Consistent with theory, we find modest reductions in employment and hours worked when food stamps are introduced. The results are larger for single-parent families.

Suggested Citation

  • Hilary Williamson Hoynes & Diane Whitmore Schanzenbach, 2010. "Work Incentives and the Food Stamp Program," NBER Working Papers 16198, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16198
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    More about this item

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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