Is the social safety net a long-term investment? Large-scale evidence from the food stamps program

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051120-wp-Is the social safety net a long-term investment-Bailey Hoynes Rossin-Slater and Walker
Authors:

Martha J. Bailey, University of Michigan, Ann Arbor
Hilary W. Hoynes, University of California Berkeley
Maya Rossin-Slater, Stanford University
Reed Walker, University of California Berkeley


Abstract:

We use novel, large-scale data on 43 million Americans from the 2000 Census and the 2001 to 2013 American Communities Survey linked to the Social Security Administration’s NUMIDENT to study how a policy-driven increase in economic resources for families affects children’s long-term outcomes. Using variation from the county-level roll-out of the Food Stamps program between 1961 and 1975, we find that children with access to greater economic resources before age five experience an increase of 6 percent of a standard deviation in their adult human capital, 3 percent of a standard deviation in their adult economic self-sufficiency, 8 percent of a standard deviation in the quality of their adult neighborhoods, 0.4 percentage-point increase in longevity, and a 0.5 percentage-point decrease in likelihood of being incarcerated. Based on these estimates, we conclude that Food Stamps’ transfer of resources to families is a highly cost-effective investment into young children, yielding a marginal value of public funds of approximately 56.

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