Is the Social Safety Net a Long-Term Investment? Large-Scale Evidence from the Food Stamps Program

80 Pages Posted: 6 Apr 2020 Last revised: 4 Jul 2021

See all articles by Martha J. Bailey

Martha J. Bailey

University of Michigan at Ann Arbor - Department of Economics

Hilary Williamson Hoynes

University of California, Berkeley; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Maya Rossin-Slater

Stanford University

Reed Walker

University of California, Berkeley - Haas School of Business

Date Written: April 2020

Abstract

We use novel, large-scale data on 43 million Americans from the 2000 Census and the 2001 to 2013 American Communities Survey linked to the Social Security Administration’s NUMIDENT to study how a policy-driven increase in economic resources for families affects children’s long-term outcomes. Using variation from the county-level roll-out of the Food Stamps program between 1961 and 1975, we find that children with access to greater economic resources before age five experience an increase of 6 percent of a standard deviation in their adult human capital, 3 percent of a standard deviation in their adult economic self-sufficiency, 8 percent of a standard deviation in the quality of their adult neighborhoods, 0.4 percentage-point increase in longevity, and a 0.5 percentage-point decrease in likelihood of being incarcerated. Based on these estimates, we conclude that Food Stamps’ transfer of resources to families is a highly cost-effective investment into young children, yielding a marginal value of public funds of approximately 56.

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Suggested Citation

Bailey, Martha Jane and Hoynes, Hilary Williamson and Rossin-Slater, Maya and Walker, Reed, Is the Social Safety Net a Long-Term Investment? Large-Scale Evidence from the Food Stamps Program (April 2020). NBER Working Paper No. w26942, Available at SSRN: https://ssrn.com/abstract=3569407

Martha Jane Bailey (Contact Author)

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

Hilary Williamson Hoynes

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Maya Rossin-Slater

Stanford University ( email )

Stanford, CA 94305
United States

Reed Walker

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

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