The Impact of SNAP Work Requirements on Labor Supply
50 Pages Posted: 26 Dec 2018 Last revised: 27 Aug 2020
Date Written: August 27, 2020
This study explores the impact of work requirements for the Supplemental Nutrition Assistance Program (SNAP) on the labor supply of able-bodied adults without dependents, exploiting unique features of SNAP work requirements. First, states can exempt individuals living in certain areas from work requirements. Second, the work requirements apply only to adults aged below 50. Using a triple difference model that compares the time-series changes in labor supply for age groups on either side of the age threshold in areas before and after the exemption, I find that suspending work requirements does not discourage employment; a decrease in employment of more than 1.4 percentage points among people who are potentially affected by the exemption can be ruled out with a 95% confidence interval. I also find evidence of a reduction in hours of work among older prime-age workers due to the work exemption. Further analysis uncovers two reasons why the work exemption has little effect on employment. First, many new SNAP participants who enrolled due to the exemption are the long-term non-employed who have no labor supply to reduce. Second, the generous income deductions in benefit calculation act as work incentives by significantly lowering the effective benefit reduction rate at very low income ($0–600). These findings indicate that the SNAP work requirement is unlikely to achieve the intended goal of promoting employment; instead it may increase the risk of disadvantaged individuals failing to receive the assistance they need.
Keywords: SNAP, Work Requirements, Labor Supply, ABAWD
JEL Classification: H53, I38, J22
Suggested Citation: Suggested Citation