Hilary W. Hoynes, Diane Whitmore Schanzenbach, Douglas Almond made a genuinely important contribution to the debate on the effects of social welfare programs in this NBER working paper/revised manuscript
“Long Run Impacts of Childhood Access to the Safety Net”
They took advantage of a natural experiment to estimate the long run effects of access to Food Stamps (SNAP) in utero and in early infancy. SNAP was introduced at different times in different US counties. From 1964 when counties could provide food stamps until 1973 participation increased pretty much linearly so in 1968 food stamps were provided in roughly half of US counties.
This is crazy policy, but it is also a natural experiment. By comparing the experience of people (whose parents didn’t have high school degrees) born at the same time in counties with and without food stamps, they can estimate the effect of food stamps.
Here is the abstract of the paper (my bold)
A growing economics literature establishes a causal link between in utero shocks and health and human capital in adulthood. Most studies rely on extreme negative shocks such as famine and pandemics. We are the first to examine the impact of a positive and policy-driven change in economic resources available in utero and during childhood. In particular, we focus on the introduction of a key element of the U.S. safety net, the Food Stamp Program, which was rolled out across counties in the U.S. between 1961 and 1975. We use the Panel Study of Income Dynamics to assemble unique data linking family background and county of residence in early childhood to adult health and economic outcomes. The identification comes from variation across counties and over birth cohorts in exposure to the food stamp program. Our findings indicate that the food stamp program has effects decades after initial exposure. Specifically, access to food stamps in childhood leads to a significant reduction in the incidence of “metabolic syndrome” (obesity, high blood pressure, and diabetes) and, for women, an increase in economic self-sufficiency. Overall, our results suggest substantial internal and external benefits of the safety net that have not previously been quantified.
So they have statistically significant quasi expermimental evidence that food stamps reduce dependency in the long run. This welfare program helps prevent the intergeneration transmission of poverty. Food stamps are now a demonstrably effective way to fight the culture of poverty.
The sincere belief of Paul Ryan’s favorite anti-poverty worker Bishop Shirley Holloway
“You don’t dream when you’ve got food stamps” has basically been proven false. It never made much sense, since SNAP is available to the working poor. Benefits are gradually reduced with income creating a high marginal tax rate, but not a cliff. Republilogic says that benefits to the working poor sap their energy in a mysterious way. If this were true, it would affect the Hoynes et al results.
Also note how food stamps have a significant long term effect on obesity. Obesity was signficantly reduced by pre and neo natal access to food stamps (well to the nutrients — I mean the fetuses couldn’t actually grab the food stamps and the babies would have tried to eat the stamps not buy food with them).
This causes me to doubt the judgment of Charles Lane who challenged the claim that food insecurity is a major problem in the USA and asked ” Look at the people on the street today: Based on that, would you say that America has a hunger problem or an obesity problem?” As anyone who looked at the same street would guess, food insecurity causes later obesity. The Hoynes et al paper basically rejects the null that it doesn’t (at the 5% level).
Much more importantly there is a small chance that the statistical analysis of Hoynes,Whitmore and Almond will have some effect on the current debate in Congress over how much to cut SNAP. The convincing evidence that the indirect effects of SNAP add to the direct benefits of reducing hunger should devastate the standard argument against welfare.
I don’t really expect evidence to have much effect on Congress this year, but do spread the word. It’s important.