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«The Effect of Food Stamps on Children’s Health: Evidence from Immigrants’ Changing Eligibility Chloe N. East University of Colorado Denver ...»

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The Effect of Food Stamps on Children’s Health:

Evidence from Immigrants’ Changing Eligibility

Chloe N. East

University of Colorado Denver

chloe.east@ucdenver.edu

September 2, 2016

Abstract

The Food Stamp program is currently one of the largest safety net programs

in the United States and is especially important for families with children: 25% of

all children received Food Stamp benefits in 2011. The existing evidence on the

effects of Food Stamps on children’s and families’ outcomes is limited, however, because it is a federal program with little quasi-experimental variation. I utilize a large, recent source of quasi-experimental variation–changes in documented immigrants’ eligibility across states and over time from 1996 to 2003–to estimate the effect of Food Stamps on children’s health. I study the medium-run health effects of these policy changes on U.S.-born children of immigrants, whose parents were subject to the eligibility variation. I find loss of parental eligibility has large effects on contemporaneous household program participation, and an additional year of parental eligibility, between the time children are in utero to age 4, leads to large improvements in health outcomes at ages 6-16. This provides some of the first evidence that early-life resource shocks impact later-life health as early as school age.

JEL Codes: H5, I1, I3 I am grateful for helpful comments from Liz Ananat, Marianne Bitler, Kathryn Edwards, Hilary Hoynes, Lucia Kaiser, Price Fishback, Doug Miller, Marianne Page, Giovanni Peri, Todd Sorenson, and Ann Stevens, as well as the participants of the RIDGE Conference, the Association for Public Policy and Management Annual Conference, the Western Economic Association Annual Conference, the All California Labor Conference, the seminar series at UN Reno and Sonoma State University, the UC Davis Center for Poverty Research Graduate Student Retreat, and the Applied Micro Brownbag at UC Davis. I would also like to thank Adrienne Jones and the staff at the Center for Disease Control Research Data Center in Maryland for support in accessing my data, and David Simon for guidance in the data application process. The findings and conclusions in this paper are those of the author and do not necessarily represent the views of the Research Data Center, the National Center for Health Statistics, or the Centers for Disease Control and Prevention. I thank the following people for excellent comments and suggestions: This research was made possible through generous funding from the RIDGE Center for Targeted Studies Doctoral Dissertation Grant and the Bilinksi Foundation. All errors are my own.

“Doctors a

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1 Introduction The Food Stamp program is the largest cash or near-cash means-tested safety net program in the United States.1 Nearly 15% of the total population and 25% of all children received benefits from the program in 2011, up from 6-10% of the population in the 1990s and early 2000s. Among families with children that participate in the program, Food Stamps play a crucial role in their total resources; if benefits were counted at their cash-equivalent value, they would reduce the poverty rate among participators by 16% in 2011.2 As a result of the growing importance of this program, there has been increased interest among policymakers and economists about the costs of the program, in terms of direct expenditures and labor supply disincentives (Mulligan, 2012; Ganong and Liebman, 2013), as well as the benefits of the program, especially the effects of the program on families’ nutrition and children’s outcomes (Beatty and Tuttle, 2014; Kreider et al., 2012; Schmidt, Shore-Sheppard and Watson, 2015). Concerns over increased spending have resulted in several small cuts to Food Stamp generosity recently, with potentially larger cuts still on the horizon (Grovum, 2014).3 Despite all this, very little is known about the effects of the Food Stamp program, because it is a federal program with little variation in eligibility rules or benefit amounts across geographic locations or over time (Currie, 2003), which would typically be used to conduct quasi-experimental analysis. Existing quasi-experimental estimates of the effects of the program on children’s and families’ outcomes rely on the program’s roll-out in the 1960s (Almond, Hoynes and Schanzenbach, 2011; Hoynes, Schanzenbach and Almond, 2016) and the applicability of those estimates to current generations is unclear, as there have been major changes over time to the Food Stamp program and other safety net programs, as well 1 In 2008 the Food Stamps program was renamed the Supplemental Nutrition Assistance Program (SNAP), but I use the name Food Stamps throughout this paper.

2 Sources are Moffitt (2013), the The Center on Budget and Policy Priorities (2013a), Murray (2011), and the Food Research and Action Center (2012). The calculation of the effect on the poverty rate is static and ignores behavioral responses.

3 In 2013, Congress allowed the benefit increase from the American Recovery and Reinvestment Act of 2009 to expire (Dean and Rosenbaum, 2013). In 2014, Congress eliminated the “heat and eat loophole” (Chokshi, 2014), which is a procedure by which states give households with no heating bill (e.g. many renters) Low-Income Home Energy Assistance that allows them to receive slightly larger Food Stamp benefit amounts.





1 as changes in health care technology, average health, and the demographics of the overall population. For more recent cohorts, researchers compare children’s outcomes among families that participate to those that do not (Kreider et al., 2012), which may suffer from biases due to endogenous program participation, or they utilize recent state changes in application procedures and eligibility rules as instruments for participation, but these changes had mostly small effects on participation (Ganong and Liebman, 2013; Ziliak, 2015).4 Therefore, all in all, the effect of Food Stamps on current children’s outcomes is still largely unknown.

In this paper, I take advantage of a recent, large change in Food Stamp eligibility for a well-defined and easily identifiable group, to study the effect of access to Food Stamps on children’s health. Specifically, I utilize changes in eligibility among documented immigrant families: many foreign-born lost eligibility for the Food Stamp program in 1996 as part of welfare reform (the Personal Responsibility and Work Opportunity Reconciliation Act) and eligibility was subsequently restored to them at different times across different states from 1998 to 2003. Welfare reform caused immigrants’ participation in Food Stamps to decline significantly (Fix and Passel, 1999; Haider et al., 2004) and in this paper I examine the “downstream” effects of this loss of eligibility, as well as the restoration of eligibility, on children’s health.5 These policy changes create a very rich source of variation in eligibility to exploit in my empirical strategy: eligibility depends on state and year of residence, country of birth (U.S. or not) and year of entry to the U.S. for foreign-born. Moreover, as eligibility is turned “off” and then back “on”, it is very unlikely that trends in children’s health would be driving the results. While on the one hand, immigrants are a select group of individuals who are more disadvantaged than natives (Raphael and Smolensky, 2009), on the other hand, in the U.S., children of immigrants currently make up almost 25% of all children and one third of children in poverty. Additionally, prior to welfare reform, 20% of all children receiving Food Stamps were children of immigrants.6 Thus, estimating the downstream effects of these eligibility changes is very important both to provide new estimates of the impact of Food Stamps on children’s health, as well as to understand the consequences of these large eligibility changes.

In the primary analysis I investigate the effects of early-life Food Stamp eligibility on health at school age (6-16), but before turning to these downstream effects, I first examine 4 The papers using this latter methodology examine a variety of effects of the program including the effects on children’s health, and are summarized by Hoynes and Schanzenbach (2015).

5 Some researchers suggested that the decline in immigrant participation may have been due in part to “chilling effects” from a harsh policy environment in addition to the changes in eligibility rules (Fix and Passel, 1999; Borjas, 2003; Haider et al., 2004).

6 Children of immigrants defined as children with at least one foreign-born parent. Sources are KidsCount (2014), Addy and Wight (2012) and author’s calculation from the Food Stamp Quality Control Data.

2 the direct effect of the changes in eligibility on participation in the program. Because I am linking early-life changes in Food Stamp eligibility to health in later life, I restrict the sample to U.S.-born children of immigrants to ensure that, other than changes in Food Stamp eligibility, the early life experiences of these children are as similar as possible. This restriction means that all children in my analysis are U.S. citizens and it is their parents who lose eligibility for the program. Despite the fact that children remain eligible, loss of parental eligibility reduces the benefit amount families are eligible to receive, because this amount is a

function of the number of eligible household members.7 This has two potential implications:

families continue to receive benefits, but the benefit amount falls substantially, or families no longer participate in the program, because these lower benefits do not outweigh the costs of participating (Daponte, Sanders and Taylor, 1999; Van Hook and Balistreri, 2006). To focus on children most likely to be affected by these changes, my primary sample is U.S.-born children whose mothers have a high school education or less, because this group participated in the program at higher rates than the full population before welfare reform. With the 1995Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS), I find that the changes in parental eligibility led to large changes in participation–loss of parental eligibility reduced participation by 32% in my sample. There is less evidence that these families continued to participate in the program and received smaller benefits.

Building off of these findings, I utilize restricted access data from the National Health Interview Survey (NHIS) to examine the effect of parental eligibility from the time children are in utero to age 4, on their health at ages 6 to 16. These medium-run effects are of interest for two reasons. First, the early years of life are critical for development: poor nutrition and lack of resources during this time can have lasting detrimental impacts on children’s health and cognitive ability (Prado and Dewey, 2012). Second, changes in health may occur slowly in response to changes in resources, so examining contemporaneous measures of health may understate the total effect of Food Stamps on health (Grossman, 2000; Currie, 2009). I find that among U.S.-born children of immigrants, whose mothers have a high school education or less, an additional year of parental eligibility in early life reduces the likelihood children are reported in “Poor”, “Fair” or “Good” health (relative to “Excellent” or “Very Good” health) by 1.6 percentage points (6%). Moreover, I find suggestive evidence that an additional year of parental eligibility reduces the likelihood of having any overnight hospitalizations, the number of school days missed, and the likelihood of having two or more doctor visits in the past 12 months. The estimates are robust to the inclusion of children of natives as a “control” group in a triple difference model, as well as accounting for changes in the generosity of other 7 For example, for a family of 3 with two foreign-born parents and one U.S.-born child, loss of parental eligibility reduces the maximum benefits the family can receive by almost 66% ($200 per month in 1998$s).

3 safety net programs. Falsification tests on children of natives and a subgroup of children of immigrants, who were exempt from the eligibility restrictions, confirm there were no commensurate changes in these “untreated” children’s health.

In addition to providing one of the only quasi-experimental evaluations of the modern Food Stamp program on children’s health, this paper also contributes to the literature examining the effects of early-life resource shocks on individuals’ long-run outcomes in adulthood (summarized by Almond and Currie (2011) and Currie and Almond (2011)).8 More recently, this literature has also documented the longer-run effects of childhood access to the safety net, including the mother’s pension program in the 1910-30s (Aizer et al., 2016), and the expansions to public health insurance programs in the 1980-90s (Brown, Kowalski and Lurie, 2015; Cohodes et al., 2015; Currie, Decker and Lin, 2008; Miller and Wherry, 2014; Wherry et al., 2015; Wherry and Meyer, 2015).9 Early-life public health insurance leads to medium-run improvements in health in later childhood, and has long-run benefits in adulthood in terms of both health and human capital outcomes. In this paper, I focus on the largest cash or near-cash program in the modern safety net, and my findings illustrate that, like public health insurance, near-cash programs have large beneficial effects on modern children’s medium-run health outcomes.10 Moreover, understanding the effects in the medium-run is important because if benefits are present at this time, this impacts welfare analysis of early-life interventions, as well as provides insight into the mechanisms behind the long-run effects.

The rest of the paper proceeds as follows. In section (2) I describe the Food Stamp program and the policy variation I utilize and review the related literature. I describe the data I use to estimate the effects on participation and children’s health in section (3). In section (4) I outline my empirical strategy. I discuss the results on Food Stamp participation and child health in section (5). Section (6) concludes.

8 Simon (forthcoming), Ludwig and Miller (2007) and Sanders (2012) are exceptions as they all look at the effect of early-life shocks on outcomes during later childhood and early adulthood.



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