Cashless SNAP Units with Children & State TANF Policy

Background & Purpose

Federal statistics on the characteristics of SNAP/food stamps-participating households display a striking trend over the past two decades—an increase in the proportion of households with no source of cash income. In 2015, approximately 22% of SNAP households had zero gross income compared to only 9% in 1997. There has been limited research on the circumstances of “zero-income” SNAP units, however. Approximately 70% of SNAP clients are individuals in families with children. It is therefore particularly important to identify whether the “zero-income” trend applies to SNAP units with minors. Further, the overall increase in zero-income cases overlaps with declining cash assistance caseloads under Temporary Assistance for Needy Families. The retrenchment of cash benefits could expose more households to a period of no cash income.

In this paper, I first examine whether there is variation over time and across states in “zero-income” cases as a proportion of all SNAP-receiving units with children. I then model the probability of a SNAP unit with children reporting no cash income as a function of household and state-year characteristics to understand whether differences in cash assistance accessibility are related to the risk of a spell of zero income.

Methods

I construct a dataset of SNAP units from 2001 to 2015 using the SNAP Quality Control database, a monthly sample of SNAP units that gathers information on household composition and sources of income. I restrict this sample to households with children (n=346,631).

I examine patterns of zero-income SNAP receipt across time and across states using descriptive and graphical analyses. I then estimate a logit model of the probability of a SNAP household reporting zero income. The model includes state and year effects, household compositional characteristics (e.g., number of children, presence of people with disabilities), and a set of state-year variables operationalizing relevant economic and policy factors. Cash assistance accessibility is measured using the state-year ratio of TANF-receiving families to families in poverty (Center on Budget and Policy Priorities, 2018).

Results

The percentage of SNAP units with children with no cash income increased from approximately 7% in 2001 to 14% in 2015. These cases are unevenly geographically distributed, accounting for 4% percent of all units with children in Vermont to 19% in Alabama in 2015. The logit analysis indicates that increased access to TANF is associated with a reduced probability of a unit reporting no income, though this relationship is only statistically significant in single female-headed units.

Conclusions and Implications

Over-time trends and state patterns in the prevalence of “cashless” SNAP units with children parallel findings on extreme poverty in other recent research (Edin & Shaefer, 2015). This study provides evidence that changes in cash assistance accessibility under TANF are related to these deep forms of economic deprivation. While in-kind benefits such as SNAP are a valuable lifeline, the retraction of the cash safety net exposes households with children to more extreme economic risks.