Inside the War on Poverty: The Impact of Food Stamps on Birth Outcomes

Abstract

This paper evaluates the health impacts of a signature initiative of the War on Poverty: the introduction of the modern Food Stamp Pro- gram (FSP). Using variation in the month FSP began operating in each U.S. county, we find that pregnancies exposed to FSP three months prior to birth yielded deliveries with increased birth weight, with the largest gains at the lowest birth weights. We also find small but statistically insig- nificant improvements in neonatal mortality. We conclude that the sizable increase in income from FSP improved birth outcomes for both whites and African Americans, with larger impacts for African American mothers. N this paper, we evaluate the health consequences of a sizable improvement in the resources available to Ameri- ca's poorest. In particular, we examine the impact of the Food Stamp Program (FSP), which in 2007 provided $34 billion in payments to about 13 million households, on infant health. Our paper makes two distinct contributions. First, although the goal of the FSP is to increase the nutri- tion of the poor, few papers have examined its impact on health outcomes. Second, building on work by Hoynes and Schanzenbach (2009), we argue that the FSP treatment represents an exogenous increase in income for the poor. Our analysis therefore represents a causal estimate of the impact of income on health, an important topic with little convincing evidence due to concerns about endogeneity and reverse causality (Currie, 2009). We use the natural experiment afforded by the nation- wide rollout of the modern FSP during the 1960s and early 1970s. Our identification strategy uses the sharp timing of the county-by-county rollout of the FSP, which was initially constrained by congressional funding authorizations (and ultimately became available in all counties by 1975). Speci- fically, we use information on the month the FSP began operating in each of the roughly 3,100 U.S. counties and examine the impact of the FSP rollout on mean birth weight, low birth weight, gestation, and neonatal mortality. Throughout the history of the FSP, the program para- meters have been set by the U.S. Department of Agriculture (USDA) and are uniform across states. In the absence of the state-level variation often leveraged by economists to eval- uate transfer programs, previous FSP research has typically resorted to strong assumptions as to the comparability of FSP participants and eligible nonparticipants (Currie, 2003). Not surprisingly, the literature is far from settled as to what casual impact (if any) the FSP has on nutrition and health. Hoynes and Schanzenbach (2009) use this county rollout to examine the impact of the FSP on food consumption using the PSID. They found that the introduction of the FSP increased total food spending and decreased out-of-pocket food spending. Importantly, consistent with the predictions of canonical microeconomic theory, the magnitude of the increase in food expenditures was similar to an equivalent- sized income transfer, implying that most recipient house- holds were inframarginal (that is, they would spend more on the subsidized good than the face value of the in-kind transfer). As one of the largest antipoverty programs in the United States—comparable in cost to the earned income tax credit (EITC) and substantially larger than Temporary Assistance to Needy Families (TANF)—understanding FSP effects is valuable both in its own right and for what it reveals about the relationship between income and health. 1