Which Form of Cash is Best for Families? Associations between Lump Sum Versus Regular Payments and Food Insecurity

Abstract

This study examined whether different forms of cash, a one-time, lump sum payment compared to a series of smaller payments delivered on a regular interval, promote families’ food security in different ways. A lump sum payment, which provides a large amount of money at once, may have the power to reduce food insecurity intensely and immediately, but these effects would likely diminish as the payment is spent down. Regular payments, alternatively, may promote smaller changes in food insecurity, but these effects would likely last longer. We estimated longitudinal models using surveys that assessed food insecurity among families with young children in the U.S. before and after they received a lump sum payment, the economic stimulus payments of 2021, and before and after they received regular payments, the monthly expanded Child Tax Credit (CTC) payments. We found that both forms of payment predicted declines in food insecurity. However, the lump sum, economic stimulus payments were associated with reductions in severe indicators of food insecurity immediately and only reductions in less severe indicators in the months to follow. The regular, CTC payments predicted declines in food insecurity most months, with variations in severity across months, suggesting they may not have been large enough to promote food security at times when other pressing expenses arose. These findings suggest that lump sum payments may be better suited for addressing food insecurity during times of crisis, while regular payments may be more appropriate for longer-term stability, so long as the amount is large enough.

Keywords: cash assistance, food insecurity, COVID-19 pandemic, lump sum payment, regular payment