Research

We study household income inequality in both Great Britain and the United States and the interplay between labour market earnings and the tax system. While both Britain and the US have witnessed secular increases in 90/10 male earnings inequality over the last three decades, this measure of inequality in net family income has declined in Britain while it has risen in the US. We study the interplay between labour market earnings in the family, assortative mating, the tax and benefit system and household income inequality. We find that both countries have witnessed sizeable changes in employment which have primarily occurred on the extensive margin in the US and on the intensive margin in Britain. Increases in the generosity of the welfare system in Britain played a key role in equalizing net income growth across the wage distribution whereas the relatively weak safety net available to non-workers in the US mean this growing group has seen particularly adverse developments in their net incomes.

In this report we examine the health consequences of food insecurity among seniors. The report updates our earlier studies on this issue by examining how trends in health and nutrition outcomes among food secure and food insecure seniors have changed over the past decade before and after the Great Recession. Using data from the 1999-2014 National Health and Nutrition Examination Survey, we find that (1) Food insecure seniors have lower nutrient intakes. For each of the eleven nutrients, average intakes are statistically significantly lower by between 9 and 26 percent for food insecure seniors in comparison to food secure seniors. After controlling for other confounding factors, the effect of food insecurity is still negative for each of the nutrients albeit in some of the cases, the effect is statistically insignificant. These differences in nutrient intakes held across time as well; (2) Food insecure seniors have worse health outcomes. For a wide array of health outcomes, food insecure seniors are worse-off than food secure seniors. Namely, they are 65 percent more likely to be diabetic, twice as likely to report fair or poor general health, 2.3 times more likely to suffer from depression, over 30 percent more likely to report at least one ADL limitation, 19 percent more likely to have high blood pressure, 57 percent more likely to have congestive heart failure, 66 more likely to have experienced a heart attack, twice as likely to report having gum disease, and 91 percent more likely to have asthma. These differences were present in both the aggregate and for each four-year time period we examined. And, with the exception of gum disease, these worse outcomes hold even after controlling for other factors, though attenuated in magnitude; and (3) The effect of food insecurity holds even for a lower-income sample. As shown in Ziliak and Gundersen (2017), food insecurity rates are substantially higher for those with incomes less than two times the poverty line. So, we investigated whether or not the negative association of food insecurity with nutrient intakes and health remain even when we limit our multivariate analyses to those with incomes below twice the poverty line. We find that, in the main, the substantive and statistical significance of the results are quite similar to those for the full sample. This further demonstrates the importance of looking at food insecurity as an independent predictor of negative health and nutrition outcomes, even among lower-income seniors.

Rising rates of food insecurity have led researchers to examine how the local retail food environment affects household food purchases, consumption, and food security. Research has paid particular attention to the presence of “food deserts,” areas with low or no spatial access to retail stores, such as supermarkets and large grocery stores, which sell fresh food and groceries at affordable prices. Low spatial access to supermarkets and grocery stores is thought to increase the costs of acquiring food for the household and reduce household food consumption. Few data sources, however, can link local food retailers and pricing, household food purchases, and food insecurity in space. To address these gaps in the literature, this project explores the relationships between household food security, food purchases, food pricing, and the geography of the local retail food infrastructure, using unique public and restricted use data files from the National Household Food Acquisition and Purchase Survey (FoodAPS). Household shopping outcomes are modeled in preliminary analyses reported here as a function of spatial access to retailers. We believe our findings will be of interest to policymakers, advocates, and program executives seeking to improve food security among low-income populations.

A long literature in economics concerns itself with differential allocations of resources to different children within the family unit. In a study of approximately 1,500 very disadvantaged families with children in Boston, Chicago, and San Antonio from 1999 to 2005, significant differences in levels of food allocation, as measured by an indicator of food “insecurity,” are found across children of different ages and genders. Using answers to unique survey questions for a specific child in the family, food insecurity levels are found to be much higher among older boys and girls than among younger ones, and to be sometimes higher among older boys than among older girls. Differential allocations are strongly correlated with the dietary and nutritional needs of the child. However, the differences in allocation appear only in the poorest families with the lowest levels of money income and family resources in general, and most differences disappear in significance or are greatly reduced in magnitude when resources rise to only modest levels. Differences in food insecurity across different types of children therefore appear to be a problem primarily only among the worst-off families.

This annual report for calendar year 2015  demonstrates that seniors continue to face serious challenges despite a recent slight decline in food insecurity. 

Specifically, in 2015 we find that: (1) 14.7% of seniors face marginal food insecurity, 8.1% face food insecurity and 3.1% are very low food secure. This translates into 9.8 million, 5.4 million, and 2.1 million seniors, respectively; (2) From 2014 to 2015, there were statistically significant declines in the proportion of seniors facing both marginal food insecurity and food insecurity. However, there was no change in those facing very low food security. These declines were most pronounced among those living in metro areas, African Americans, Hispanics, and younger seniors; (3) Compared to 2001, the fraction of seniors experiencing marginal food insecurity, food insecurity, and very low food security has increased by 37%, 53%, and 121%. The number of seniors in each group rose 109%, 135%, and 250% which also reflects the growing population of seniors. and (4) Continuing with historic trends documented in prior reports, we find that marginal food insecurity is greatest among those living in states in the South and Southwest, those who are racial or ethnic minorities, those with lower incomes, and those who are younger (ages 60-69). 

We estimate the effect of welfare reform on the intergenerational transmission of welfare participation and related economic outcomes using a long panel of mother-daughter pairs over the survey period 1968-2013 in the Panel Study of Income Dynamics. Because states implemented welfare reform at different times starting in 1992, the cross-state variation over time permits us to quasi-experimentally separate out the effect of mothers’ welfare participation during childhood on daughters’ economic outcomes in adulthood in the pre- and post-welfare reform periods. We find that a mother’s welfare participation increased her daughter’s odds of participation as an adult by roughly 30 percentage points, but that welfare reform attenuated this transmission by at least 50 percent, or at least 30 percent over the baseline odds of participation. While we find comparable-sized transmission patterns in daughters’ adult use of the broader safety net and other outcomes such as educational attainment and income, there is no diminution of transmission after welfare reform. These results are obtained by addressing nonrandom selection into welfare and are robust to other potential threats to identification from misclassification error, life-cycle age effects, and cross-state mobility.

Our research project addressed the question of how well SNAP and the social safety net protects families against the risk of food insecurity and poor health during economic downturns. Previous research has documented the relationship between reductions in family incomes and food insufficiency and has examined the effects of resources that mitigate the effects of income volatility. The U.S. social safety net, including SNAP, exists to mitigate the deleterious effects of swings in family income, particularly among low- and moderate-income households. This work compares outcomes for lower income families and higher income families in response to economic downturns. To the extent that nutritional, food security and food-related health outcomes are unaffected by economic downturns, there is implicit evidence that the social safety net is working to protect economically disadvantaged families.

Recent studies have used a distributional analysis of welfare reform experiments suggesting that some individuals reduce hours in order to opt into welfare, an example of behavioral-induced participation. Using data on Connecticut’s Jobs First experiment, we find no evidence of behavioral-induced participation at the highest conditional quantiles of earnings. We offer a simple explanation for this: women assigned to Jobs First incur welfare participation costs to labor supply at higher earnings where the control group is welfare ineligible. Moreover, as expected, behavioral components and costs of program participation do not seem to play a differential role at other conditional quantiles where both groups are eligible to participate. Our findings show that a welfare program imposes an estimated cost up to 10 percent of quarterly earnings, and these costs can be heterogeneous throughout the conditional earnings distribution. The evidence is obtained by employing a semi-parametric panel quantile estimator for a model that allows women to vary arbitrarily in preferences and costs of participating in welfare programs.

The food stamp program (SNAP) is one of the most important elements of the social safety net and is the second largest anti-poverty program for children in the U.S. (only the EITC raises more children above poverty). The program varies little across states and over time, which creates challenges for quasi-experimental evaluation. Notably, SNAP benefit levels are fixed across 48 states; but local food prices vary widely, leading to substantial variation in the real value of SNAP benefits. In this study, we leverage time variation in the real value of the SNAP benefit across markets to examine the effects of SNAP on child health. We link panel data on regional food prices and the cost of the Thrifty Food Plan, as measured by the USDA’s Quarterly Food at Home Price Database, to restricted-access geo-located National Health Interview Survey data on samples of SNAP-recipient and SNAP-eligible children. We estimate the relationship between the real value of SNAP benefits (i.e., the ratio of the SNAP maximum benefit to the TFP price faced by a household) and children’s health and health care utilization, in a fixed effects framework that controls for a number of individual-level and region characteristics, including non-food prices. Our findings indicate that children in market regions with a lower real value of SNAP benefits utilize significantly less health care, and may utilize emergency room care at increased rates. Lower real SNAP benefits also lead to an increase in school absences but we find no effect on reported health status.

The Supplemental Nutrition Assistance Program (SNAP; formerly known as food stamps) can have important impacts that extend beyond its intended aims to improve food security and nutrition, particularly for health and health care use. This project examined the impact of SNAP receipt and benefit level on the health of adults and children using two natural experiments to address selection bias: 1) state policy variation in SNAP in an instrumental variables (IV) analysis; and, 2) the temporary expansion of SNAP benefits and eligibility provided through the American Recovery and Reinvestment Act (ARRA) in a difference-in-difference (DD) approach. We used restricted data from the National Health Interview Survey (NHIS) from 2008 to 2014, restricting our sample to persons in SNAP-eligible and low-income SNAP-ineligible households. The IV analysis suggests that SNAP receipt is associated with improved health and reductions in foregone medical care due to affordability among adults and children. However, we find little evidence that ARRA’s temporary benefit increase led to any changes in health or health care use. Whereas SNAP receipt may improve health and health care use for populations close to the eligibility threshold (and thus induced to participate by some policies), the relatively small increase and reduction in SNAP benefits may not have been substantial enough to change health outcomes.