The Benefits of the Safety Net, Part 2

July 2nd, 2013 at 3:02 pm

A few weeks ago I wrote about the role of the safety net to catch folks buffeted by market failure.  I argued that the evidence showed that programs like Unemployment Insurance and food stamps (now called SNAP) performed well in this regard, ramping up to meet the increased need induced by the great recession.

That’s a short-term, “counter-cyclical” argument: when the economy goes down, we should unapologetically expect the safety net goes up (and vice-versa).  But new research from poverty scholars Hilary Hoynes and Diane Schanzenbach provides evidence of important impacts that go well beyond the business cycle:

SNAP likely pays significant long-term health and economic dividends for children who have access to its benefits. While some policymakers suggest that we have failed to appreciate the long-run harm to beneficiaries and taxpayers from SNAP and other safety net programs, our research suggests that, if anything, the opposite may be true: we have failed to appreciate the long-run benefits to participants – particularly children – and to the taxpayer from SNAP and other safety net programs.

The researchers take advantage of the natural experiment generated by the fact that when it was introduced in the 1960s, the food stamp program was gradually phased in across the nation.  Thus, they can compare various outcomes among kids who received nutritional benefits with those who did not.

We find that in the short-run access to the Food Stamp program improved infant health. In particular, pregnant women who had access to this safety net program during her third trimester gave birth to babies with higher average birth weights. The increases in birth weight were largest at the bottom of the birth weight distribution and in counties with the highest rates of baseline poverty.

Since higher birth weight and improved infant health are associated with better adult outcomes, the research asked how the kids who got food support did as adults compared to similarly situated kids that did not.

…we found that adults’ health…was markedly improved if they had access to the safety net during childhood. In particular, we found that access to food stamps mattered most in early childhood, through ages three to five.

There were also able to examine other outcomes, finding that early food stamp receipt for girls (though not for boys) was later associated with greater educational attainment, higher earnings, and—note this one—less reliance on the safety net.

This last finding is important. Our results suggest rather than the Food Stamp program creating an inter-generational “welfare trap,” the reverse is more likely true. Providing benefits to children at important stages of their development allows them to grow in ways that may help enable them to escape poverty when they reach adulthood.

Finally, this finding regarding food stamps long-run impact is not as sui generis as you might think–the authors link to other studies showing longer-term benefits from the earned income credit and housing vouchers as well.  See also, toward the end of this piece by my CBPP colleagues, a review of  this literature on longer-term benefits associated with safety net receipt.

Since Reagan, conservatives have been remarkably successful in putting defenders of the safety net on the defensive, often on the basis of mythical, or at least highly exaggerated, unintended consequences.  In reality, compelling evidence points the other way.  It’s time we move to offense.

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4 comments in reply to "The Benefits of the Safety Net, Part 2"

  1. Redtomkidd says:

    Yes. This.

    This is what being progressive is about: caring about people and helping as if they were family, especially during the hard times. We do this not because of the data or statistics, but because we know in our hearts that it is the just thing to do. Having the data to back it up, though … that ain’t bad either.

    • jo6pac says:

      Yep and we need more true Progressives in the world and not the so called professional type progressive that want to do anything from chained cpi to doling out just enough funds to keep people a live but with no hope for the future.

  2. Steve Roth says:

    Thanks for the pointers. Good stuff.

    In general, rather than talking about the “safety net,” I think it’s more effective to talk about social programs as a “platform” or “springboard.”

    Give ten, twenty, thirty million more Americans a place to stand, and they’ll move the world.

  3. isomorphismes says:

    Why does it need to be about either market failure or children?

    If as an entrepreneur I know that irrespective of the (even efficient) failure of my venture I will be housed and clothed, that has to lead me to take on more risk than if I might die if I leave my stable job.