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The Effects of Minimum Wages on Food Stamp Enrollment and Expenditures

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  • Reich, Michael
  • West, Rachel

Abstract

We provide the first analysis of how minimum wage policy affect s enrollments and expenditures i n the Supplemental Nutrition Assistance Program (SNAP). Exploiting state and federal - level variation in minimum - wage policy between 1990 and 2012, and incorporating local controls in our specifications, we find that a 10 percent minimum wage increase reduces SNAP enrollment between 2.4 and 3.2 percent, and reduces program expenditures an estimated 1.9 percent. If the federal minimum wage were increased from $7.25 to $10.10, enrollment would fall between 7 .5 and 8.7 percent (3. 1 to 3. 6 million persons) relative to 2012 levels, and annual expenditures would decrease 6 percent ($4.6 billion).

Suggested Citation

  • Reich, Michael & West, Rachel, 2015. "The Effects of Minimum Wages on Food Stamp Enrollment and Expenditures," Institute for Research on Labor and Employment, Working Paper Series qt0wh9z8x4, Institute of Industrial Relations, UC Berkeley.
    • Handle: RePEc:cdl:indrel:qt0wh9z8x4
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    1. Sylvia Allegretto & Arindrajit Dube & Michael Reich & Ben Zipperer, 2017. "Credible Research Designs for Minimum Wage Studies," ILR Review, Cornell University, ILR School, vol. 70(3), pages 559-592, May.
    2. Sylvia A. Allegretto & Arindrajit Dube & Michael Reich, 2011. "Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(2), pages 205-240, April.
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    6. David Neumark & William Wascher, 1992. "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws," ILR Review, Cornell University, ILR School, vol. 46(1), pages 55-81, October.
    7. Justin Wolfers, 2006. "Did Unilateral Divorce Laws Raise Divorce Rates? A Reconciliation and New Results," American Economic Review, American Economic Association, vol. 96(5), pages 1802-1820, December.
    8. Mulligan, Casey B., 2012. "The Redistribution Recession: How Labor Market Distortions Contracted the Economy," OUP Catalogue, Oxford University Press, number 9780199942213.
    9. Marianne E. Page & Joanne Spetz & Jane Millar, 2005. "Does the minimum wage affect welfare caseloads?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(2), pages 273-295.
    10. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," Working Papers 0903, Harris School of Public Policy Studies, University of Chicago.
    11. Congressional Budget Office, 2014. "The Effects of a Minimum-Wage Increase on Employment and Family Income," Reports 44995, Congressional Budget Office.
    12. Daniel Aaronson & Eric French & Isaac Sorkin, 2013. "Firm Dynamics and the Minimum Wage: A Putty-Clay Approach," Working Paper Series WP-2013-26, Federal Reserve Bank of Chicago.
    13. Arindrajit Dube & T. William Lester & Michael Reich, 2010. "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 945-964, November.
    14. French, Eric Baird & Aaronson, Daniel & Sorkin, Isaac, 2016. "Industry Dynamics and the Minimum Wage: A Putty-Clay Approach," CEPR Discussion Papers 11097, C.E.P.R. Discussion Papers.
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    Cited by:

    1. George L. Wehby & Dhaval M. Dave & Robert Kaestner, 2020. "Effects of the Minimum Wage on Infant Health," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 411-443, March.
    2. Jinglin Feng & Linlin Fan & Edward C. Jaenicke, 2024. "The distributional impact of SNAP on dietary quality," Agricultural Economics, International Association of Agricultural Economists, vol. 55(1), pages 104-139, January.
    3. Brady P. Horn & Johanna Catherine Maclean & Michael R. Strain, 2017. "Do Minimum Wage Increases Influence Worker Health?," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1986-2007, October.
    4. Aaron Sojourner & José Pacas, 2019. "The Relationship Between Union Membership and Net Fiscal Impact," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(1), pages 86-107, January.
    5. Arindrajit Dube & Attila S. Lindner, 2024. "Minimum Wages in the 21st Century," NBER Working Papers 32878, National Bureau of Economic Research, Inc.
    6. Bru Laín & Lluís Torrens, 2019. "Barcelona’s minimum living wage initiative," Transfer: European Review of Labour and Research, , vol. 25(3), pages 387-391, August.
    7. Riser, Quentin H. & Rouse, Heather L. & Dorius, Cassandra J., 2023. "Association between early income variation around poverty thresholds, income trajectories, and birth, child, and family characteristics," Children and Youth Services Review, Elsevier, vol. 145(C).
    8. Randy Albelda & Michael Carr, 2017. "One Step Forward, One Step Back? Labor Supply Effects of Minimum Wage Increases on Single Parents with Public Child Care Support," Working Papers 2017_01, University of Massachusetts Boston, Economics Department.
    9. Dami'an Vergara, 2022. "Minimum Wages and Optimal Redistribution," Papers 2202.00839, arXiv.org, revised Dec 2022.
    10. Arindrajit Dube, 2019. "Minimum Wages and the Distribution of Family Incomes," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 268-304, October.
    11. Richard V. Burkhauser & Drew McNichols & Joseph J. Sabia, 2023. "Minimum Wages and Poverty: New Evidence from Dynamic Difference-in-Differences Estimates," NBER Working Papers 31182, National Bureau of Economic Research, Inc.
    12. Wang, Duoyu & Cleary, Rebecca, 2024. "The Effect of SNAP on Black Households' Nutritional Quality of Food Purchases," 2024 Annual Meeting, July 28-30, New Orleans, LA 343960, Agricultural and Applied Economics Association.
    13. Regmi, Krishna, 2020. "The effect of the minimum wage on children’s cognitive achievement," Labour Economics, Elsevier, vol. 65(C).

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