Income Volatility and Implications for Food Assistance Programs II

Overview

The National Poverty Center (NPC), Gerald R. Ford School of Public Policy, University of Michigan and the Economic Research Service (ERS), U.S. Department of Agriculture (USDA), sponsored a research conference to be held in Washington, DC, on November 16-17, 2006. The program, organized by Rebecca Blank and Sheldon Danziger on behalf of the NPC, and Dean Jolliffe and David Smallwood on behalf of ERS, consisted of eight to ten papers, with one discussant per paper. Selected conference papers are likely to appear in a conference volume or special issue of a journal.

Purpose

The conference built the body of knowledge on a topic of great importance to USDA and ERS's Food Assistance and Nutrition Research Program (FANRP.) By including policymakers and analysts, the conference fostered informed dialogue on policy alternatives. Specifically, the conference was designed to:

• Showcase and foster research on the effects of income volatility on program participation.
• Stimulate new, high-quality research on issues related to program and compliance costs.
• Improve the quality of current food assistance and poverty research by facilitating interaction among researchers, practitioners, and policymakers.
• Foster discussion on the optimal design of eligibility, certification, and income reporting requirements for food assistance program

Background

A goal of means testing is to maximize the coverage of benefits to eligible recipients while minimizing the leakage of benefits to those not in the targeted group. As eligibility requirements become more precisely defined or strictly enforced, leakage is reduced but administrative costs and participant burden increase. For programs requiring a large amount of documentation, some eligible recipients may decide that the costs associated with benefit receipt are too high and decline to participate. Such tradeoffs are present in all means-tested transfer programs.

The focus of the conference was on income volatility and how it affected these tradeoffs for domestic food assistance programs. Specifically, we are interested in descriptive statistics and research on income volatility and the movement in and out of program eligibility, the decision to participate, compliance over time, and program costs. For example, what are the behavioral implications of income volatility for the level, frequency, and duration of transfer-program participation? How important is income volatility in determining program eligibility? What is the impact of fluctuating income on administrative and transaction costs of income-tested transfer programs?

The conference built on the success of a previous event, 'Income Volatility and Implications for Food Assistance Programs,' which was co-sponsored in May 2002 by FANRP and the University of Wisconsin-Madison's Institute for Research on Poverty (IRP.) The papers from that conference were published in a special issue of the Journal of Human Resources, volume 38, 2003. (Paper summaries are available in the Summer 2002 issue of the IRP's research publication, Focus)

Abstracts of conference papers

Overview Presentation: Trends in Income and Consumption Volatility, 1970-2000. Benjamin J. Keys, University of Michigan.

Income Volatility and Food Stamp Participation in Three American Cities. Robert Moffitt, Johns Hopkins University and David Ribar, George Washington University.

Income Volatility and Low-Income Support Programs. Robin Boadway, Queen's University and Katherine Cuff, McMaster University.

Food Assistance for the Working Poor: Simulating the Impact of the Nutrition Tax Credit on the Food Stamp Program. Thomas MaCurdy, Stanford University and Grecia Marrufo, SPHERE Institute.

Income Volatility, Food Insufficiency and Food Stamp Receipt in the U.S.: The Effect of Welfare Reform. Neil Bania, University of Oregon and Laura Leete, Willamette University.

Earnings Volatility and the Processes of Getting and Staying on Food Stamps. David Ribar, George Washington University and Marilyn Edelhoch, South Carolina Dept. of Social Services.

Food Assistance Programs and the Economic Patterns of Single Mothers Following Poverty Exits. Quinn Moore, Anu Rangarajan, and Peter Schochet, Mathematica Policy Research, Inc.

The Age Gradient in Food Stamp Program Participation: Does Income Volatility Matter? Craig Gundersen, Iowa State University and James Ziliak, University of Kentucky.

Food Assistance Program Participation Among Fragile Families. Daphne Hernandez, University of Michigan and Kathleen Ziol-Guest, Harvard University.

The Dynamics of Food Stamp Receipt after Welfare Reform among Current and Former Welfare Recipients. Brian Cadena, Sheldon Danziger, and Kristin Seefeldt, University of Michigan.

Household Income Volatility: Measurement and Implications for NSLP Eligibility. Constance Newman, USDA Economic Research Service.

Certification Duration For Food Assistance Programs, Mark Prell, USDA Economic Research Service.