Nearly One-Sixth of Population On Food Stamps

Food-stamp use grew 2.3% in June from a year earlier, with nearly one-sixth of the U.S. population receiving benefits.
Illinois showed the largest enrollment increase from last year with a 14.7% gain, according to Agriculture Department data released Friday. Wyoming was in second place, with rolls up 11.1% since the same time last year. Utah experienced the largest annual decline in food-stamp use, dropping 11.2%, among a dozen states to post a decrease. (Enrollment also decreased in Arizona, Idaho, Maine, Michigan, Missouri, New Hampshire, North Dakota, Oregon, South Carolina, Pennsylvania and Washington.)
One of the largest social safety net programs in the United States, food stamps – formally known as the Supplemental Nutrition Assistance Program, or SNAP – expanded substantially during and after the recession, with enrollment rising about 70% from 2007 to 2011. At the same time, the government also temporarily increased benefits and allowed users in the hardest-hit areas to receive aid for longer-than-usual periods of time. The average monthly benefit was $133 last year.

Critics clamor against what they see as a disturbing rise in government dependency. But new economic research suggests the program’s expansion isn’t alarming and can, in fact, be explained by business cycles.
In a recent paper  published by the National Bureau of Economic Research,Jeffrey B. Liebman and Peter Ganong find that food-stamp enrollment shows a strong and persistent correlation with local unemployment rates. They attribute the increase in food-stamp rolls from 2007 to 2011 primarily to the recession—both higher unemployment and the temporary policy changes made to the program in response to the downturn. The surge in enrollment over the period was mostly due to the “program’s built-in automatic stabilizer features operating as usual in the midst of a very severe recession,” they write.
In another paper released in May, economists Hilary Hoynes and Marianne Bitlerpresent similar findings, arguing that the enrollment patterns during the most recent recession align with previous recessions when controlling for the magnitude of the downturn. “The program is responsive to business cycles to the same degree it has been in other recessions,” says Ms. Hoynes. “This is a large recession—the enrollment levels are in step with the magnitude of the labor shock.”
The recession ended in 2009, and the economy has steadily been adding jobs. If food-stamp rolls can largely be explained by fluctuations in business cycles, then why hasn’t the program been shrinking as the economy started recovering? “It’s a timing issue,” says Ms. Hoynes.
Historical data show that the decline in the unemployment rate after recessions tends to lag behind GDP growth. Similarly, the drop in food-stamp participation lags behind the decrease in unemployment.  “This is consistent with previous recessions,” she says.
The 2009 fiscal stimulus program’s temporary increase in food stamp benefits, which may have also boosted incentives to enroll, is set to expire Nov. 1. Congress is not expected to mitigate the scheduled cuts.
Growth in food-stamp use has leveled off in the last year, increasing at a slower pace than it did from 2007 to 2011. The Congressional Budget Office projects that food-stamp expenditure, measured as a share of gross domestic product, will decrease to its mid-1990s level by 2019, according to analysis by the Center on Budget and Policy Priorities, a left-leaning think tank.