(_ CurrentPerspectiveson FoodStampProgramParticipation

UnitedStates

Nutrition FoodStampProgram

Asnalystseantiz':Participatio o, nRates:

August 1085
CurrentPerspectiveson Food Stamp ProgramParticipation

Titles in this series:

FoodStampProgramParticil_ationRates

(November1988) Pat DoyleandHaroldBeebout

FoodStampProgramParticipationRatesAmongthe Poverty

Population,1980-1987

(November1988) CaroleTrippeandHaroldBeebout

Determinantsof Participationin the FoodStampProgram:

A Reviewof the Literature

(November1989) SusanAllinandHaroldBeebout

EstimatingRatesof Participationin the FoodStampProgram:

A Reviewof the Literature

(November1989) CaroleTrippe

FoodStampProgramParticipationRates:

August 1985

(April1990) PatDoyle

___,.,.ddlm
I I II I III I

__ UnitedStates Foodand 3101ParkCenter Drive

Departmentof Nutrition Second Floor

Agriculture Service Alexandria,VA22302

Food Stamp Program

ParticipationRates:

August 1985

PatDoyle

A productof

Mathematica Policy Research, Inc.

600MarylandAvenue,S.W.

Suite 550

Washington,DC20024

April 1990
ACKNOWLEDGMENTS

The authors would like to thank Steven Carlson, Robert Dalrymple, Alana Landey,

Carole Trippe and Harold Beebout for their thoughtful comments as well as Ann Huff for

preparation of the statistics for Food Stamp Program participation rates, Susan .Allin for her

technical review and editorial assistance and Carolyn Dunn, Sheana Thomas and Patrice

Turner for preparation of the manuscript.

MPR Project Number: 7725-200

FNS Contract Number: 53-3198-7-31

FNS Project Officer: Alana Landey

This analysis was performed under a competitively awarded contract in the amount of

$2,687,161.
CONTENTS

Chapter Pa2e

EXECUTIVE SUMMARY .............................................. ix

I. INTRODUCTION ................................................... 1

IL METHODOLOGY AND DATA ........................................ 5

A. THREE ALTERNATIVE lVIEAS_ OF FSP PARTICIPATION ......... 5

1. The IndividualParticipationRate ................................ 5

2. The Household Participation Rate ............................... 6

3. The Benefit Rate ............................................ 6

B. ESTIMATION OF PARTICIPATION RATES ......................... 6

IlL RESULTS ........................................................ 11

A. PARTICIPATION RATES BY SELECTED

DEMOGRAPHIC CHARA_STICS ............................ 13

B. PARTICIPATION RATES BY SEI.I_.CTED

ECONOMIC CHARACTERISTICS ................................ 20

C. CHARACTERISTICS OF FJJGIBT.F. NONPARTICIPANTS ............. 28

REFERENCES........................................................ 33

APPENDIX: TECHNICAL PROCED_ USED TO COMPUTE

PARTICIPATION RATES ...............................................35

,4. USING ADMINIS'rRATIVE DATA TO F_SrlMATE THE NUMBER OF

PARTICIPANTS ................................................ 37

B. USING SIPP TO F_SrIMA_ THE NUMBER OF ELIGIBLF$ ........... 38

1. Development of the Analysis File ............................... 38

2. An Assessment of the Eligibility Simulation ........................ 40

(2. IMPACT OF MEASUREIvIENT AND REPORTING ERRORS ........... 42

1. Comparison Of Participation Rates Before And After Adjustment Of

Program Operations Data For Errors In Issuance ................... 44

2. Impact Of Sampling And Nousampling Errors On Estimates Of The Number

Of Food Stamp Eligibles ...................................... 45

3. Impact Of Asset Measures On Estimates Of Eligibles

And Participation Rates ...................................... 53

m

TABLES

Table Pa_e

TABLE 1 INDIVIDUAL, HOUSEHOLD, AND BENEFIT PARTICIPATION

RATES, AUGUST 1985 ......................................... 12

TABLE 2 HOUSEHOLD PARTICIPATION RATES BY HOUSEHOLD

SIZE, AUGUST 1985 ........................................... 14

TABLE 3 INDIVIDUAL PARTICIPATION RATES BY SELECTED

DEMOGRAPHIC CHARACrERISTICS, AUGUST 1985 ............... 15

TABLE 4 HOUSEHOLD PARTICIPATION RATES BY SEI3q.CTED

DEMOGRAPHIC CHARACTERISTICS, AUGUST 1985 ............... 16

TABLE 5 BENEFIT RATES BY SR_.RCrED DEMOGRAPHIC

CHARACTERISTICS OF THE HOUSEHOLD,

AUGUST 1985 ................................................ 19

TABLE 6 HOUSEHOLD PARTICIPATION RATES BY THE LEVR. L

OF MONTHLY BENEPTrs, AUGUST 1985 ......................... 21

TABLE 7 INDIVIDUAL PARTICIPATION RATES BY THE RATIO

OF GROSS INCOME OF THE INDIVIDUAL'S FOOD STAMP

UNIT TO THE MONTHLY FEDERAL POVERTY LEVEL,

AUGUST 1985 ................................................ 22

TABLE 8 HOUSEHOLD PARTICIPATION RATES BY THE RATIO

OF GROSS INCOME OF THE FOOD STAMP UNIT TO THE

MONTHLY FEDERAL POVERTY LEVEL, AUGUST 1985 ............ 23

TABLE 9 BENEP/T RATES BY THE RATIO OF GROSS INCOME OF

THE FOOD STAMP UNIT TO THE MONTHLY FEDERAL

POVERTY l._/l_I_ AUGUST 1985 ............................... 24

TABLE 10 HOUSEHOI.D PARTICIPATION RATES BY SELECTED

SOURCES OF INCOME, AUGUST 1985 ........................... 27

TABLE 11 CHARACrERISTICS OF ELIGIBLE NONPARTICIPANTS

ABOVE AND BELOW POVERTY, AUGUST 1985 ................... 29

TABLE 12 DEMOGRAPHIC AND ECONOMIC CHARACrERISTICS

OF ELIGIBLE NONPARTICIPANT HOUSEHOLDS,

AUGUST 1985 ................................................ 31

V
TABLE A1 HOUSEHOLD PARTICIPATION RATES BY SELECTED

HOUSEHOLD CHARACTERISTICS, UNADJUSTED FOR

ERRORS IN ISSUANCE, AUGUST 1985 ........................... 46

TABLE A2 INDIVIDUAL PARTICIPATION RATES BY SELECTED

CHARACTERISTICS, UNADJUSTED AND ADJUSTED FOR

ERRORS IN ISSUANCE, AUGUST 1985 ........................... 48

TABLE ,43 BENEFIT PARTICIPATION RATES BY SELECTED

HOUSEHOLD CHARACTERISTICS, UNADJUSTED AND

ADJUSTED FOR ISSUANCE ERRORS, AUGUST 1985 ............... 49

TABLE A4 IMPACT ON SAMPLING AND NONSAMPLING ERROR ON

ESTIMATES OF ELIGIBI.FS AND PARTICIPATION RATES,

AUGUST 1985 ................................................ 50

TABLE A5 IMPACT OF ASSET MEASURF_3 ON ESTIMATES OF ELIGIBLES

AND PARTICIPATION RATES, AUGUST 1985 ..................... 54

vi
FIGURES

Fi2u_ Pa_e

FIGURE A-1 FACTORS AFFECTING THE SIMI_TION OF FOOD STAMP

ELIG-IBII JTY WITH SIPP AND THE DIRECTION OF

THE BIAS .................................................. 43

vii

EXECUTIVE SUMMARY

Policymakers are interested in the extent to which the Food Stamp Program (FSP) is

serving its target population, as well as which subgroups are more or less likely to participate

in the program. This report is the second in a series of reports providing estimates of

participation in the FSP using more accurate data on eligibles and participants than has

previously been available.

The FSP participation rate is the ratio of the number of persons (or households)

participating in the FSP (or the actual benefits paid to participants) to the number of persons

(or households) who are eligible for the program (or the total benefits payable if all eligible

households participated). The estimates presented in this paper indicate that, in the 50 states

and the District of Columbia in August 1985, the following were true:

· 64 percent of the eligible individuals participated in the FSP;

· 59 percent of the eligible households participated in the program; and

* participating households received 75 percent of the benefits payable

had all eligible households participated.

The higher rate for individuals than for households implies that larger households were more

likely to participate than smaller ones. The finding that the benefit rate was higher than the

household rate implies that households eligible for largcr bcnefits were more likely to

participate than households eligible for smaller benefits. These participation rates, while not

strictly comparable to earlier findings due to methodological differences, are approximately the

same as those reported for 1984 (Doyle and Beebout, 1988).

ESTIMATES OF PARTICIPATION BY SELECTED DEMOGRAPHIC CHARACTERISTICS

The estimates show considerable variation across selected demographic groups.

* Regardless of the participation measure used (individual, household,

or benefit), preschool children and school-aged children participated at

higher than average rates. For example, the individual rates were 75

percent for preschoolers and 73 percent for school children. The

benefit rate for households with school children was 82 percent,

compared to an overall benefit rate of 75 percent.

· Among the elderly, however, only 37 percent of eligible individuals

participated, although the rate was higher among those living alone

(41 percent), and was higher still among those receiving Supplemental

Security Income (SSI) (67 percent).

ix
· Among the disabled, close to 50 percent of the eligible individuals and

eligible households participated, receiving 66 percent of the benefits

payable if participation had been 100 percent.

· Among households headed by a single woman with children,

approximately 75 percent participated.

· Households headed by black, nonhiapanic individuals participated at a

much higher rate (77 percent) than households headed by white,

nonhi._panic individuals (49 percent) or hispanic individuals (55

percent).

ESTIMATES OF PARTICIPATION BY SEI.ECTED ECONOMIC CHARACTERISTICS

The estimates for eligible individuals and households with different economic characteristics

show strong variation as well.

· Participation generally varied inversely with income. Individuals and

households in poverty participated at considerably higher rates (79

percent and 75 percent, respectively) than individuals and households

overall

· Participation was greater among those eligible for larger benefits; the

household rates ranged from 27 percent for monthly benefits under

$10 to 87 percent for monthly benefits in excess of $150.

· Households with earnings had a lower-than-average participation rate

(37 percent), whereas households receiving SSI, unemployment

compensation, or public assistance participated at higher-than-average

rates (66, 76 and'll61 percent, respectively).

CHARACTERISTICS OF ELIGIBLE NONPARTICIPANTS

Approximately 4.8 million out of the 11.7 million households eligible for food stamps

did not participate in the program. More than half of the eligible nonparticipants had

incomes above the poverty line; one-third were eligible for a monthly benefit of $10 or less.

The nonparticipants were equally divided among four groups: households with elderly

persons, both above and below the poverty line, and households with workers, both above and

below the poverty line. Elderly nonparticipating households tended to consist of a single

individual while nonelderly nonparticipating households tended to consist of the working poor

with children. About haft of the households above poverty were eligible for small benefits

($10 or leas) and, hence, their lack of participation is not surprising. However, households in

poverty who did not participate tended to be eligible for large benefits (over half were eligible

for $75 or more per month).

lA percentage greater than 100% is obtained due to measurement and sampling errors in the

data.
I. INTRODUCTION

The Food Stamp Program (FSP) provides low-i_come households with assistance in

buying the food they need to maintain a nutritious diet. A food stamp household is generally

defined as a person living alone, or a group of persons living together and sharing food

purchases and meal preparation, whose monthly income and assets fall below specified limits.

The assistance is in the form of coupons that can be redeemed for food purchases. The

amount of the coupons is based on household size and income.

Not all households eligible for food stamps actually participate in the program. The

literature on the program suggests a variety of reasons for nonparticipation. 1 Some people

may be unaware of the program, while others may presume they are not eligible for benefits.

Other people may be aware of the program and their own eligibility for it, but view the

benefits aa not worth the effort required to obtain and use them. Still others may not

participate because of the stigma they associate with the use of food stamps.

Obviously, since some eligible households do not apply for benefits, the FSP is not

serving the entire population targeted by the legislation that established the program. Indeed,

according to prevailing conceptual models of the decision to participate in the program,

participation should not be expected to be universal (see Allin and Beebout, 1989). But even

if participation will never be universal, the Congress and other policymakers are interested in

the proportion and characteristics of the eligible population that actually does participate in

the program_ They are also interested in which subgroups of the target population are more

likely than others to participate in the program.

1See Allin and Beebout (1989) for a review of the literature.

1
This paper is the sixth in a series examining current issues on FSP participation, and

the second which provides estimates of rates of participation in the FSP both among the total

eligible population and among selected subgroups of that population that are of particular

interest to polieymakers. 2 Previous estimates of FSP participation have varied widely,

because of differences in methodologies, differences in data sources, and inadequacies in the

data sources. 3 The estimates reported in this series are more comprehensive and more

accurate than most previous estimates. For this reason, and because these estimates are

generally higher than most of the participation rates reported in previous research, this report

should be of interest to policyrnakers who want to know how many and which program

eligibles participate in the FSP.

Because substantial methodological improvements were made to the procedures used to

estimate participation rates between the study of August 1984 participation rates (Doyle and

Beebout, 1988) and the current study of August 1985 rates, the results of these papers are not

directly comparable. These improvements are summarized in the Appendix.

The estimates in this series of reports are more accurate than most previous ones

primarily because they are based on the Survey of Income and Program Participation (SIPP).

Because eligibility for the FSP cannot be observed directly, the denominator of the

participation rate (the total number of program eligibles or total potential benefits) has to be

approximated using household survey data. In comparison to the household surveys used in

previous research, such as the Current Population Survey (CPS), SIPP contains more, and

more detailed, information on the household characteristics FSP administrators must consider

2'rhe first report in the series which provides estimates of participation rates is Doyle and

Beebout (1988).

3For a review of the literature on FSP participation rates and estimation techniques, see Trippe

0988).

2
when making actual eligibility determinations. 4 For example, SIPP contains information on

monthly (as opposed to annual) income, monthly household composition, most of the

expenses used in calculating deductions from income, and vehicular assets, thereby

significantly advancing our ability to approximate eligibility status using survey data.

Data for the numerators of the overall participation rates calculated here were derived

from the Food Stamp Program Statistical Summary of Operations (hereafter referred to as

Program Operations data) and were adjusted to account for benefits issued in error in August

1985.s These administrative data are more accurate than the self-reported survey data

employed in some previous studies of FSP participation since recent research has indicated

that food stamp recipiency tends to be substantially underreported in household survey data

(U.S. Department of Commerce, 1987). Because the numerators of the ratios reported here

are based on admini._trative counts, they are more reliable estimates of the number of actual

participants and the amount of benefits pa/d. The Program Operations data do not, however,

contain data on subgroups of the participating population. Estimates for these groups were

calculated using a sample of food stamp case records from the Integrated Quality Control

System (IQCS) of the U.S. Department of Agriculture. 6

Although our estimates represent an improvement over previous results, they are not

without their own sampling and measurement limitations. In particular, the underreporting of

public assistance income and recipiency common to all household surveys causes unrealistic

nThe exception to this comparison is the 1979 Income Survey Development Program Research

Test Panel (ISDP), the precursor to SIPP.

SThe Food Stamp Program Statistical Summary of Operations is a monthly record of benefits

issued and caseload serviced under the Food Stamp Program.

si'he IQCS is a system of ongoing case record reviews designed to measure payment error rates

in the Food Stamp, Aid to Families with Dependent Children (AFDC), and Medicaid programs.

The IQCS is based on monthly probability samples drawn from all 50 states and the District of

Columbia; this study uses active cases in the July/August 1985 samples.

3
estimates of food stamp participation rates among public assistance households. Furthermore,

the survey does not provide all of the information needed to perfectly determine the food

stamp-eligible unit in all households. In short, althoug.h this analysis represents a considerable

improvement over most previous efforts, perfect statistics on the FSP-eligible population, or

of subgroups participating in the program, are unattainable. Further research can reduce, but

not eliminate, the uncertainties in estimation.

The remainder of this report is organized as follows. An overview of the methodology

used is presented in Chapter II, while Chapter 111reports the results for the overall

participation rates, the rates disaggregated by selected demographic and economic

characteristics, and the characteristics of those eligibles who did not participate. The report

concludes with a technical appendix descn'bing our procedures for estimating food stamp

participation rates and differences in methodology between this report and the first report of

this series on program participation (Doyle and Beebout, 1988); estimates of sampling error in

the participation rate estimates; and the impact of asset measures on estimates of eligibles and

participation rates.

4
H. METHODOLOGY AND DATA

This section describes the methodology employ .c4Jin constructing the FSP participation

rates presented in this report. Three rates of participation used in the literature are

introduced and defined, followed by a discussion of how these rates are computed. The latter

discussion includes a description of the criteria that FSP administrators use in making actual

eligibility and benefit determinations and an explanation of how a model of those criteria was

used to estimate the number of eligibles with SIPP data.

A. THREE ALTERNATIVE MEASURES OF FSP PARTICIPATION

No single measure of participation can adequately answer all the questions

policymakers have about participation in the FSP. The three alternative measures discussed

in the literature--the individual rate, the household rate, and the benefit rate-differ not only

in their magnitude, but also in their advantages and limitations in answering a given question.

It is therefore important to define each measure, specify its potential usefulness, and explain

how it has been used in previous studies.

1. The Individual Participation Rate

The individual participation rate is a ratio of the number of persons participating in the

FSP to the number of persons eligible for the program. Policy discussions about FSP

participation rates have tended to focus on research results based on the individual rate,

whercaz discussions about participation behavior usually focus on a model of the household as

the decision-making unit. In some instances, the individual rate may be preferable to the

household rate, especially in answering questions about the participation of a particular

subgroup of the target population. For example, the proportion of eligible elderly individuals
who participate in the FSP is a better indication of the behavior patterns of the elderly than is

the proportion of all eligible households with an elderly member that participate.

2. The Household Participation Rate

The household participation rate is the ratio of the number of food stamp units, or

households, participating in the program to the number of households eligible for the

program. As just noted, analyses of participation behavior tend to rely on this rate because

the household is seen as the decision-making unit. The definition of the household as the

decision-making unit is derived in part from program rules that determine eligibility and

benefits for households, not for individuals. The household rate can differ significantly from

the individual rate because larger households are more likely to participate in the FSP than

one-person households.

3. The Benefit Rate

The benefit rate is the ratio of the actual benefits paid to program participants to the

total potential benefits payable if all program eligl'bles participated. Although it has not been

used extensively in previous research, the benefit rate may be the best overall measure of how

well the FSP is meeting the target population's need for assistance. The benefit rate

estimates reported here are generally higher than the individual and household rate estimates,

indicating that households with higher benefit levels, and, thus, greater need, are more likely

to participate than households with lower benefit levels.

B. ESTIMATION OF PARTICIPATION RATES

Estimates of the numerators in the participation rate ratios reported here are based on

administrative data derived from three sources as described in the Appendix. The first source

is the Program Operations data providing the number of persons and households issued
benefits in August 1985 and the total dollar value of the coupons issued. These data were

adjusted to eliminate ineligible participants and erroneous benefits as determined from the

IQCS. Finally, the adjusted total number of participat'mg households and persons and their

benefits were distributed across various demographic and economic characteristics based on

information from a sample of case records active in July and August 1985. 7

Estimates of the denominators of the participation rate ratios were developed from

SIPP using the procedures outlined in the Appendix. In essence, a model of the food stamp

eligibility criteria formed the basis for determining which SIPP respondents belonged in the

sample of program eligl'bles. This model used a simulation procedure whereby we quantified

the program rules discussed below and applied them to each dwelling unit in the SIPP sample

in August 1985. For units determined to be eligible as a result of this simulation, we

estimated composition and potential benefits. Below we summarize the criteria program

administrators employ in making actual determinations of eligibility and benefits.

Eligibility for the FSP is based on a series of rules defining the applicant's need, which

is deemed a function of available cash income conditional on unit (household) size, as well as

assets a_esdble to the unit? The determination of need for each household applying for

FSP benefits can be disaggregated into four distinct parts: (1) income limits, (2) asset limits,

(3) nonfinancial standards, and (4) benefit levels. The parameters of each of these parts vary

over time with cost-of-living adjustments and legislated changes in the program. This analysis

7Th_ sample of cases was developed in the preparation of an annual report on the

characteristics of food stamp households (U.S. Department of Agriculture, 1987).

SFhe discussion that follows is an overview of the regulations governing FSP eligibility and

benefits. The complete regulations appear in the Code of Federal Regulations (7 CFR parts 270-

273). A more in-depth summary of those regulations appears in Doyle and Beebout (1988).
employs the FSP criteria in existence in August 1985, the month corresponding to the

administrative and SIPP data used.

The income test is comprised of two parts: a net and a gross income screen. Under

the net income screen, monthly gross income net of allowable expenses must fall below the

monthly federal poverty guidelines which vary by household size and geographic location?

Under the gross income screen, food stamp units that do not contain elderly or disabled

members must also have gross incomes below 130 percent of the same poverty guidelines. In

August 1985, gross income, as measured by the program, included all cash income received by

members of the food stamp household, excluding the earnings of students under age 18, loans,

nonrecurring lump-sum payments, and reimbursement of certain expenses. Net income was

defined as gross income less a standard deduction, an earnings deduction, and deductions for

expenses incurred for child care, medical, and shelter costs,l°

There are also two different asset limits. In 1985, a food stamp household could have

countable assets (or resources, as they are called in the administration of the program) of

$1,500 or less and remain eligible for benefits. If an elderly person was present, and the

household contained at least two members, the asset limit was $3,000. Selected pieces of

property, such as the principal home, adjacent land, most household goods, and vehicles

needed to produce income or to transport disabled individuals are not considered countable

resources, but all other financial and nonfinancial assets are generally included. In most

instances, assets are counted at their fair market value as long as they are access_le to at

9The income limits are based on the official monthly poverty guidelines, published by the U.S.

Department of Health and Human Services (DHHS), which are adjusted each year to account for

inflation. The income guidelines and other FSP parameters are generally the same for the 48

contiguous states and the District of Columbia and vary slightly for Alaska and Hawaii and the

territories.

l°The medical deduction is only allowed for medical expenses incurred by elderly or disabled

members of the household.

8
least one member of the food stamp household. The principal exception to this is the

treatment of vehicular assets, n

Nonfinancial eligibility standards include the definition of the program unit and

characteristics of the unit (such as the presence of an elderly member) which affect eligibility.

In general, food stamp benefits are issued to "households," but there are aspects of the

program unit definition that distinguish the term fi.om the Census designation, namely, a

group of individuals who share living quarters? The food stamp household consists of a

person who lives alone, or persons who live together and share food purchases and meal

preparation, with some exceptions for households containing elderly individuals unable to

prepare their own meals. Restrictions are imposed on the formation of the food stamp

household to prevent spouses, s_lings, and parents with children under age 18 from forming

separate units within a dwelling unit even ff they purchase and prepare meals separately.

Furthermore, selected individuals within a dwelling unit are excluded altogether from

participation in the FSP. These include illegal aliens, persons refusing to comply with work

registration requirements, strikers, and residents of most institutions. The FSP also contains

several provisions designed to require able-bodied adults to work, seek training preparatory

for work, or look for work. Individuals not exempt fi.om these work registration requirements

are prohibited from participating in the program ff they refuse to comply.

llVehicles needed for work-related travel, and one additional vehicle owned by members of the

food stamp household, are valued at the current Blue Book value, and only the amount in excess

of $4,500 is considered available resources. Any remaining vehicles owned by members of the

household are subject to both a market value test and an equity test. The maximum of market

value, less $4,500, and the equity is counted towards the household's assets.

12Groups of individuals who share living quarters are referred to as dwelling units or Census

households. The latter term is significant in this analysis because the dwelling unit is commonly the

interview unit used by the Census Bureau in collecting survey data on the U.S. population.

Specifically, as noted in the Introduction, the dwelling unit is the interview unit for SIPP.

9
Households deemed eligible based on the criteria described above have their benefits

computed as the difference between the maximum food stamp benefit for their household size

and geographic location and 30 percent of their net monthly income. 13 In August 1985, the

maximum food stamp benefit in the continental United States was $264 for a family of four.

Households of size 1 or 2 whose benefit computation results in coupon values of less than $10

are issued a minimum benefit of $10.

lathe maximum food stamp benefit in 1985 was equal to the Thrifty Food Plan for a family of

4 adjusted for the size of the unit using economies of scale specified through legislation.

10
HI. RESULTS

Almost 7 million households in the 50 states and. the District of Columbia participated

in the Food Stamp Program in August 1985, as shown in Table 1. Based on the estimates

prepared from SIPP data, 11.6 million households were eligible for the program in that same

month. Thus, the overall household participation rate was 59 percent.

The overall individual rate was higher: 18.6 million individuals out of 29 million eligible

individuals, or 64 percent, participated in the FSP. The average size of a participant's

household was 2.7 persons, whereas the average size of an eligible household was 2.5 persons,

indicating that larger households were more likely to participate than smaller households.

The estimates indicate that approximately $1.07 billion in coupons would have been

issued to food stamp participants had the participation rate in August 1985 been 100 percent.

Seventy-five percent of those benefits were issued. This percentage is consistent with the

finding (shown later) that households entitled to higher benefits participated at higher rates

than those entitled to lower benefits.

The fact that the benefit rate was higher than the individual rate, which in turn was

higher than the household rate, implies that, in addition to other factors, both the size of the

household and its potential benefit influence the decision to participate. The effects of

household size and other demographic characteristics on the tendency to apply for benefits

are outlined in section 3,; the effects of potential benefits and other economic characteristics

are discussed in section B. Section C contains a discussion of the characteristics of eligible

households who did not participate in the FSP in August 1985.

11
TABLE I

Individual,Household,and Benefit

ParticipationRates,

August 1985

Participation

Participants Eliqibles Rate

Individuals(1,000) 18,560 28,884 64.3%

Households (1,000) 6,894 11,604 59.4

Benefits (1,000) $807,265 $1,072,262 75.3

Average HouseholdSize 2.7 2.5

Average Per Capita Benefit $43.5 $37.1

Sources: Counts for participants are from the Food Stamp Program Statistical

Summary of Operations adjusted for errors in issuances of benefits.

Estimatesfor eligibleswere derived from special tables prepared

using the August 1985 analysis file developedfrom SIPP, 1984 and

1985 panels. The SIPP analysisfile contains27,660 householdsin

total and 3,559 householdseligible for food stamps.

12
A. PARTICIPATION RATES BY SELECTED DEMOGRAPHIC CHARACTERISTICS

Table 2 presents household participation rates disaggregated by the size of the eligible

unit. Most eligible households are relatively small, as are most participating households. Yet

the participation rate tended to be higher for larger households, with single-person households

participating at a substantially lower rate (50 percent) than all eligible households.

Individual participation rates disaggregated by selected demographic characteristics are

presented in Table 3. The table shows that the FSP was serving a large majority of children

in eligible households in August 1985. Three-fourths of eligible preschool children, that is,

children under age 5, resided in households that participated in the program. Among schoolage children this rate was 73 percent.

The participation rates for elderly and disabled individuals (37 and 47 percent

respectively) were much lower than the overall rate for individuals and the rate for adults ages

18 to 59 (64 and 65 percent, respectively). However, the rates varied depending on the

individual's living arrangements. Elderly individuals living alone were more likely to

participate than elderly individuals living with others (41 percent versus 30 percent

respectively). Similarly, 52 percent of eligible disabled individuals living alone received

benefits under the program, whereas only 45 percent of those living with others participated.

Given that participation rates are higher than average for households of size 2 or more, this

pattern for elderly and disabled individuals is surprising, and suggests that household size may

be less of a determining factor in their decisions to participate.

Table 4 presents household participation rates by selected characteristics. These rates

also show that those who are elderly or disabled were less likely to be participating in the

program. Only 37 percent of the eligible households containing an elderly member

participated. Households with a disabled member, which are afforded most of the more

13
TABLE2

HouseholdParticipationRates

by HouseholdSize,

August 1985

Number of Number of

Participating Eligible Household

HouseholdSize Households Households Participation

(number of persons) (1,000) (1,000) Rate

I 2,313 4,649 49.8%

2 1,471 2,380 61.8

3 1,208 1,718 70.3

4 900 1,369 65.8

5 502 817 61.5

6+ 499 671 74.3

Sources: Counts for participantsare from the Food Stamp Program Statistical

Summary of Operationsadjustedfor errors in issuancesof benefits.

Estimates for eligibleswere derived from special tables prepared

using the August 1985 analysis file developedfrom SIPP, 1984 and

1985 panels. The SIPP analysisfile contains 27,660 households in

total and 3,559 householdseligible for food stamps.

14
TABLE 3

IndividualParticipationRates

by Selected DemographicCharacteristics,

August 1985

Numberof Numberof

Participating Eligible Individual

Individuals Individuals Participation

(1,000) (1,000) Rate

Living Alone

Elderly 1,068 2,588 41.3_

Disabled 194 370 52.4

Living with Others

Elderly 592 1,949 30.4

Disabled 307 686 44.8

TotalElderly 1,660 4,537 36.6

Total Disabled 501 1,056 47.4

Children under Age 18 9,181 12,490 73.5

Preschool 2,944 3,912 75.3

School-Age 6,238 8,579 72.7

Adults Ages 18 to 59 7,702 11,857 65.0

Sources: Counts for participants are from the Food Stamp Program Statistical

Summary of Operations adjusted for errors in issuances of benefits.

Estimates for eligibles were derived from special tables prepared

using the August 1985 analysis file developed from SIPP, 1984 and

1985 panels. The SIPP analysis file contains 27,660 households in

total and 3,559 households eligible for food stamps.

15
TABLE4

Household Participation Rates

by Selected Demographic Characteristics,

August 1985

Number of Number of

Participating Eligible Household

Households Households Participation

HouseholdContained: (1,000) (1,000) Rate

Elderly 1,475 3,957 37.3%

Disabled 476 1,019 46.7

ChildrenunderAge18 4,079 5,517 73.9

Children Ages 5 to 17 3,193 4,275 74.7

Single Female Adult

with Children 2,400 3,207 74.8

Single Male Adult

with Children 96 209 45.9

Two or More Adults

with Childrena 1,583 2,101 75.3

White NonhispanicHead 3,302 6,754 48.9

BlackNonhispanicHead 2,502 3,246 77.1

Hispanic Head 712 1,298 54.8

Sources: Counts for participantsare from the Food Stamp Program Statistical

Summary of Operationsadjustedfor errors in issuancesof benefits.

Estimates for eligibleswere derived from special tables prepared

using the August 1985 analysis file developed from SIPP, 1984 and

1985 panels. The SIPP analysisfile contains27,660 households in

total and 3,559 householdseligiblefor food stamps.

aIncludeshouseholds in which the gender of the householdhead is unknown and

female-headedhouseholdscontainingtwo or more adults.

16
generous eligibility standards given to households with an elderly member, participated at a

somewhat higher rate (47 percent).

Among households with children, the participation rate was 74 percent, which is much

higher than the overall household rate. The participation rate among single male-headed

food stamp households with children (46 percent) was considerably less than the participation

rate among single female-headed and two-parent households with children (75 percent).

Note, however, the former rate is based on a relatively small sample. These rates differ

drastically from the rates reported in Doyle and Becbout (1988). Those rates exceeded 100

percent for female-headed households with children. The difference reflects a change in the

method of classifying eligible households along this dimension. Doyle and Beebout classified

the food stamp-eligible household as female-headed with children if the Census dwelling unit

in which the eligible food stamp household resided was a female-headed household with

children. The rates in Table 4 reflect the classification of food stamp-eligible groups based on

the presence of children in the eligible unit and the marital status of the designated head of

the eligible unit? Because of this difference, the 1985 results are more reasonable than the

1984 results, and, hence, there is some indication that the apparent shortage of low-income

single parent households in SIPP and other household surveys (reported by Doyle and Trippe

(1989) and Doyle and Becbout (1988)) may be attributed to a large extent to the inability to

accurately measure the composition of program units within Census dwelling units with

household survey data.

Food stamp participation rates varied considerably by race and ethnicity. More than

three-fourths of the eligible households headed by a black, nonhiapanic individual participated

lnThe designated head was chosen in a somewhat arbitrary fashion. In households that reported

receiving food stamps, it is the person who reported the food stamp benefit first in the household.

In other food stamp-eligible units, it is the first adult encountered.

17
in the FSP while only half of the eligible households headed by a white, nonhispanic

individual participated in August 1985. Hispanic households participated at a rate of 55

percent.

In general, the benefit rates were higher than the corresponding individual and

household rates. Table 5 presents the benefit rates disaggregated by selected demographic

household characteristics. The benefit rate for households with an elderly member was 43

percent--6 percentage points higher than the corresponding individual rate. The pattern was

more extreme for disabled individuals; the FSP was serving just over 45 percent of the eligible

disabled individuals and households, while about 66 percent of the potential benefits for this

group were being provided. This pattern implies that, within each of these groups, the

needier households participated at a higher rate than less needy households.

Eighty-two percent of the benefits for which they were eligible were paid out to the

households with children under age 18 that were eligible for assistance. Unlike the 1984

benefit rates which were highest for female-headed households, the 1985 rates were highest

for two-parent households with children (94 percent) and lowest for single male-headed

households with children (47 percent). Female-headed food stamp households received 76

percent of the benefits which would have been issued had participation among this group

been 100 percent. The change in the participation patterns between 1984 and 1985 is an

artifact of the change in procedures used to classify food stamp-eligible households along this

dimension, as reported earlier.

Benefit levels seem to have more influence on the participation decision of two-parent

households with children than single-parent households with children. About 94 percent of

the benefits which could be issued to two-parent households with children were paid out in

August 1985, whereas only 75 percent of the eligible households of this type participated. On

18
TABLE 5

Benefit Rates

by Selected Demographic Characteristics of the Household,

August 1985.

Potential

BenefitsPaid to Benefitsfor

Participating Eligible

Households Households Benefit

HouseholdContained: (1,000,000) (1,000,000) Rate

Elderly $ 70.3 $164.8 42.7%

Disabled 42.1 64.1 65.7

ChildrenunderAge18 651.0 791.3 82.3

ChildrenAges 5 to 17 537.8 637.6 84.3

Single Female Adult

withChildren 341.2 448.5 76.1

Single Male Adult

with Children 11.9 25.2 47.4

Two or More Adults

withChildrena 297.8 317.7 93.7

WhiteNonhispanicHead 360.8 524.9 68.7

Black NonhispanicHead 310.5 358.4 86.6

Hispanic Head 94.1 154.3 61.0

Sources: Counts for participantsare from the Food Stamp Program Statistical

Summary of Operationsadjustedfor errors in issuancesof benefits.

Estimates for eligibleswere derived from special tables prepared

using the August 1985 analysis file developedfrom SIPP, 1984 and

1985 panels. The SIPP analysisfile contains27,660 households in

total and 3,559 householdseligiblefor food stamps.

aIncludeshouseholds in which the gender of the householdhead is unknown and

female-headed households containing two or more adults.

19
the other hand, benefit rates were almost identical to household rates for single

female-headed and male-headed households.

Benefit rates do not vary by race and ethnicity in the same manner as household rates.

While the highest benefit rate was among black nonhi._panic households (87 percent), the rate

among white nonhispanic households (69 percent) exceeded the rate among hispanic

households (61 percent). Thus, it appears that the level of benefits has a greater impact on

the participation decision of white nonhispanic households than households of other race and

ethnic origins.

B. PARTICIPATION RATES BY SELECTED ECONOMIC CHARACTERISTICS

Household participation rates disaggregated by leveis of potential benefits are

presented in Table 6. The estimates suggest that the decision to participate in the FSP is

influenced by the level of benefits for which a household is eligi'ble. In August 1985, the

lowest participation rate (27 percent) was among households eligi'ble for benefits no larger

than the minimum benefit of $10. In general, the participation rate increased as the potential

benefit rose, reaching a maximum of 88 percent for households whose potential benefit fell

between $151 and $200. One exception to this pattern was a very slight, and probably

insignificant, drop (from 88 to 87 percent) between the rates for households in the two

highest benefit categories.

More than three-fourths (79 percent) of the individuals in poor households (i.e., their

incomes fell below the poverty level) that were eligible for food stamps participated in the

program (Table 7). Similarly, 75 percent of households in poverty participated, receiving 81

percent of the benefits which would have been issued had all poor households participated

(Tables 8 and 9). All three rates were at least 90 percent for households with incomes below

half the poverty level, and declined rapidly as income increased. The participation rates were

2O
TABLE 6

HouseholdParticipationRates

by the Level of Monthly Benefits,

August 1985

Numberof Numberof

Participating Eligible Household

Monthly Households Households Participation

Benefit Level (1,000) (1,000) Rate

$10 600 2,201 27.34

11-25 350 799 43.9

26-50 625 1,386 45.1

51-75 749 1,236 60.6

76-100 1,323 1,958 67.6

101-150 1,302 1,791 72.7

151-200 789 gOO 87.7

201+ 1,155 1,334 86.6

Sources: Counts for participantsare from the Food Stamp Program Statistical

Summary of Operationsadjustedfor errors in issuancesof benefits.

Estimates for eligibleswere derived from special tables prepared

using the August 1985 analysis file developedfrom SIPP, 1984 and

1985 panels. The SIPP analysis file contains 27,660 households in

total and 3,559 householdseligiblefor food stamps.

21
TABLE 7

Individual Participation Rates

by the Ratio of Gross Incomeof the

Individual's Food Stamp Unit to the Monthly Federal Poverty Level,

August 1985

Numberof Numberof

Incomeas a Participating Eligible Individual

Percentageof Individuals Individuals Participation

Poverty (1,000) (1,000) Rate

Total _ 100 17,365 22,067 78.7_

0 961 1,379 69.7

1-50 6,997 7,608 92.0

51-100 9,407 13,080 71.9

Total > 100 1,195 6,816 17.5

101-130 1,145 6,411 17.g

> 131 50 405 12.3

Sources: Counts for participantsare from the Food Stamp Program Statistical

Summary of Operations adjusted for errors in issuances of benefits.

Estimates for eligibles were derived from special tables prepared

using the August 1985 analysis file developedfrom SIPP, 1984 and

1985 panels. The SIPP analysis file contains 27,660 households in

total and 3,559 householdseligiblefor food stamps.

22
TABLE8

Household Participation Rates

by the Ratio of Gross Income of the

Food Stamp Unit to the Monthly Federal Poverty Level,

August 1985

Number of Number of

Incomeas a Participating Eligible Household

Percentageof Households Households Participation

Poverty (1,000) {1,000) Rate

Total _ 100 6,457 8,655 74.6%

0 472 684 69.0

1-50 2,295 2,477 92.7

51-100 3,690 5,495 67.2

Total > 100 437 2,948 14.8

101-130 408 2,681 15.2

> 131 29 267 10.9

Sources: Counts for participants are from the Food Stamp Program Statistical

Summary of Operations adjusted for errors in issuances of benefits.

Estimates for eligibles were derived from special tables prepared

using the August 1985 analysis file developed from SIPP, 1984 and

1985 panels. The SIPP analysis file contains 27,660 households in

total and 3,559 households eligible for food stamps.

23
TABLE 9

Benefit Rates

by the Ratio of Gross Income of the

Food Stamp Unit to the Monthly Federal Poverty Level,

August 1985

Potential

Benefits Paid to Benefits for

Income as a Participating Eligible

Percentage of Households Households Benefit

Poverty (1,000,000) (1,000,000) Rate

Total _ 100 $792.5 $978.5 81.0%

0 68.1 96.9 70.3

1-50 404.2 447.8 90.3

51-100 320.2 433.8 73.8

Total > 100 15.3 93.7 16.3

101-130 15.0 88.5 16.9

> 131 0.3 5.2 6.4

Sources: Counts for participantsare from the Food Stamp Program Statistical

Summary of Operations adjusted for errors in issuances of benefits.

Estimates for eligibles were derived from special tables prepared

using the August 1985 analysis file developedfrom SIPP, 1984 and

1985 panels. The SIPP analysisfile contains 27,660 households in

total and 3,559 householdseligiblefor food stamps.

24
under 20 percent for all higher-income classes, reaching a low of 6 percent for benefits to

households with incomes above 130 percent of poverty. Households and persons in this

higher-income class were eligible for only small amounts of assistance; thus, their low

participation is not surprising.

The estimates of the three participation rates for units with incomes above 130 percent

of poverty showed an unexpected pattern. The individual participation rate for that income

class was 12 percent; the corresponding household rate was 11 percent; and the corresponding

benefit rate was 6 percent. Food stamp eligibility criteria restrict this group to households

containing an elderly or disabled individual (these households are the only ones exempt from

the gross income test). These differences in the rates imply that participating households in

this income class received lower benefits than the potential benefits of nonparticipating

eligible households in the same class. This implication is contrary to the notion that

participation rates increase as potential benefits increase. On the other hand, the sample size

for this group is somewhat small, implying that the estimates have Iow statistical reliability.

Individuals in eligible households with no cash income had a participation rate of 78

percent. Similarly, households with no income participated at a rate of 69 percent, while the

benefit rate for this group was 70 percent. Because no household can exist on zero income,

and studies based on other surveys have shown measurement problems to be prevalent in the

zero-income group, the eligible units with zero income presumably include households for

which some form of reporting or measurement error has occurred, is

Estimation of participation patterns by the receipt of selected sources of income

concludes the analysis of participation rates in the FSP. Household participation rates among

those with earnings, SSI, public assistance, and unemployment compensation are presented in

lSAs discussed in Doyle and Beebout (1988), selected studies have shown that households

classified as zero income often represent measurement or classification problems rather than

households with no source of economic support, and that is why they do not seem to behave in the

expected manner.

25
Table 10. The estimated participation rate for households with earnings was much lower than

the overall rate (37 percent versus 59 percent). Recipients of unemployment compensation,

on the other hand, participated at a higher rate (76 percent) than that of the total eligible

population. The rate for earners remained relatively constant between August 1984 and

August 1985, while the rate for those receiving unemployment compensation rose. However,

the sample size for eligible households with unemployment compensation was small, and,

therefore, these estimates, and the difference in these estimates, are of low statistical

reliability.

The household participation rate for food stamp households that received SSI

payments--66 percent--exceeded the overall participation rate by about 11 percent.

Households in both the numerator and the denominator of this participation rate exclude

persons receiving SSI in cashout states, where cash is issued through the SSI program in lieu

of food stamps.

Households that contained an elderly member and that also received SSI participated at

a much higher rate--67 percent--than did all households that contained an elderly member (37

percent, from Table 4). The rate of SSI participation by elderly individuals eligible for that

program has been estimated to be 52 to 61 percent (Shiels, Barnow, Chaurette and

Constantine, 1990), which is considerably higher than the corresponding rate for elderly

individuals eligible for food stamps (37 percent, from Table 3). Given the higher FSP

participation rate for elderly participants who received SSI than the elderly in general, it is

likely that the low overall rate of food stamp participation among the elderly was due to the

low participation rate of those who were not poor enough to qualify for SSL Such individuals

are entitled to small food stamp benefits as well

The estimates for households receiving public assistance, and especially those receiving

AFDC, exceeded 100 percent. These unrealistic rates are primarily due to the underreporting

26
TABLE 10

Household Participation Rates

by Selected Sources of Income,

August 1985.

Number of Number of

Participating Eligible Household

Households Households Participation

Sourceof Income (1,000) {1,000) Rate

Earned Income 1,352 3,674 36.8%

SSI 1,303 1,983 65.7

Elderly in the unit 863 1,296 66.6

No Elderly in the unit 440 687 64.1

Public Assistance 3,381 2,927 115.5

AFDC 2,664 2,249 118.5

Otherwelfare 761 781 97.4

UnemploymentCompensation 183 242 75.6

Sources: Counts for participantsare from the Food Stamp Program Statistical

Summary of Operationsadjustedfor errors in issuancesof benefits.

Estimates for eligibleswere derived from special tables prepared

using the August 1985 analysis file developedfrom SIPP, 1984 and

1985 panels. The SIPP analysis file contains 27,660 households in

total and 3,559 householdseligiblefor food stamps.

27
of AFDC receipt in SIPP (the number of receipients of AFDC benefits in SIPP was only 82

percent of an independent estimate derived from administrative data) discussed in the

Appendix.

C. CHARACTERISTICS OF ELIGIBLE NONPARTICIPANTS

The preceding sections focused on those households that participate in the Food Stamp

Program. In this section, the focus is on those households that were eligible for the FSP but

did not participate.

About 4.7 million of the 11.6 million households eligible for the FSP did not participate

in August 1985 (see Table 11). These households tended to have relatively high incomes and

were entitled to relatively small benefits. Among all eligible nonparticipants,

· more than half had incomes above the poverty level, and

· a third were eligible for a monthly benefit of $10 or less; more than 40

percent were eligi'ble for a monthly benefit of $25 or less.

As shown earlier in this report and in other research (Doyle and Beet)out, 1988 and ,Allin and

Beebout, 1989), those who are eligi'ble for lower benefits tend to participate in the FSP at

lower-than-average rates, so these results are not surprising. These characteristics of

nonparticipating eligibles also serve as further evidence that thc program is well-targeted to

those with comparatively greater need.

On the other hand, about half of nonparticipating eligibles had incomes below the

poverty line, and half of those were eligible to receive over $75 a month in food stamps.

28
TABLE 11

Characteristicsof EligibleNonparticipants

Above and Below Poverty

August 1985

Percent Distributionof Eligible Nonparticipating

Households a

BelowPoverty AbovePoverty Total

Benefit Level

<=$10 g.9 24.1 34.0

11-25 3.2 6.3 9.5

26-75 8.8 17.8 26.5

76+ 24.8 5.2 30.0

TOTAL 46.7 53.3 100.0

Composition

ElderlyPresent 26.5 26.2 52.7

Livingalone 14.8 17.6 32.3

Living with others 11.7 8.5 20.3

Nonelderly Households

With Earnings 21.2 22.8 44.0

With children 14.2 17.0 31.2

Without children 7.0 5.8 12.8

Total 46.7 53.3 100.00

Populationcounts

Persons (thousands) 4,702 5,621 10,323

Households (thousands) 2,198 2,511 4,711

Benefits(millions) $186.5 $78.4 $264.g

SOURCE: Eligible nonparticipantsare computedas the differencebetween

eligibles and participants. Counts for participants are from the

Food Stamp Program StatisticalSummary of Operationsadjustedfor

errors in issuancesof benefits. Estimatesfor eligibleswere

derived from special tables preparedusing the August 1985

analysisfile developedfrom SIPP, 1984 and 1985 panels. The SIPP

analysisfile contains27,660 householdsin total and 3,559

householdseligible for food stamps.

apercentsmay not sum to 100 due to roundingerror.

29
Overall, about 30 percent of all nonparticipants were eligible for monthly benefits greater

than $75. The reasons for this group's nonparticipation are less clear. 16

Eligible nonparticipants were relatively evenly split between households containing

elderly persons and those with earnings, and households above and below the poverty line.

Table 12 illustrates that they were heavily concentrated in two poverty classes: 51 to 100

percent of poverty (38 percent) and 100 to 130 percent of poverty (48 percent). Most

nonparticipating households had either an elderly member--two-thirds of whom lived alone--or

a working member--most of whom had children. These characteristics are consistent with

earlier findings on participation rates that show below-average participation among the elderly

and the working poor.

Overall, half the eligible nonparticipating households consisted of a single adult, just

under one-third contained children, and three-fourths were headed by a white nonhi.qpanic

individual. Most eligible nonparticipating households with children (17 out of 31 percent)

were headed by a single female, although a sizable portion (11 out of 31 percent) consisted of

two-parent households. Only 5 percent of the eligible nonparticipating households were

reported to have no income, and hence may have been subject to some form of measurement

error, as noted in Section B. Very few received unemployment compensation (relatively few

eligible households have this income source), while 14 percent received SSL

16As noted earlier, it is likely that households with zero income (entitled to benefits in excess

of $75) are overrepresented because eligible units with zero income presumably include households

for which some form of measurement error has occurred. Eligible nonparticipant households with

zero income comprise 5 percent of the total eligible nonparticipant group (from Table 12) and

about 16 percent of eligible nonparticipant households with benefits in excess of $75 per month.

30
TABL_ 12

Demographic and Economic Characteristics

of Eligible Nonparticipant Households

August 1985

Population Counts Distribution of Households

Household size a

1 2,336 49.6%

2 909 19.3

3 510 10.8

4 469 10.0

5 315 6.7

6+ 172 3.7

Households containing: b

Elderly 2,482 52.7

Elderly living alone 1,520 32.3

Disabled 543 11.5

Disabled living alone 176 3.7

Children under age 18 1,438 30.5

Children under age 5 633 13.4

Children ages 5 to 17 1,082 23.0

Single-female with children 807 17.1

Single male with children 113 2.4

Two or more adults with children 518 11.0

White nonhlspanic head 3,452 73.2

Black nonhispanic head 744 15.8

Hispanic head 586 12.4

Income as percent of poverty a

0 212 4.5

1-50 182 3.9

51-100 1,805 38.3

101-130 2,273 48.3

131+ 238 5.1

Household income includes: b

Earnings 2,322 49.3

SSI 680 14.4

Unemployment compensation 59 1.3

Total Households 4,711 100.0

SOURCE: Eligible nonparticipants are computed as the difference between eligibles and

participants. Counts for participants are from the Food Stamp Program Statistical

Summary of Operations adjusted for errors in issuances of benefits. Estimates for

eligibles were derived from special tables prepared using the August 1985 analysis

file developed from SIPP, 1984 and 1985 panels. The SIPP analysis file contains

27,660 households in total and 3,559 households eligible for food stamps.

aPercents may not sum to totals due to rounding error.

bPercents do not sum to 100 because households may have more than one of the characteristics

listext.

31

R_CES

Allin, Susan, and Harold Beebout. "Determinants of participation in the Food Stamp

Program: A Review of the Literature." Current Perspectives on Food Stamp Program

Participation. Alexandria, VA: Food and Nutrition Service, U. S. Department of

Agriculture, 1989.

Doyle, Pat and Harold Beebout. 'Food Stamp Program Participation Rates.' Current

Perspectives on Food Stamp Program Participation. Alexandria, VA: Food and

Nutrition Service, U.S. Department of Agriculture, 1988.

Doyle, Pat, and Robert Dalrymple. 'The Impact of Imputation Procedures on Distributional

Characteristics of the Low Income Population." In Proceedings of the Bureau of the

Census Annual Research Conference IlL Washington, D.C.: Bureau of the Census,

U.S. Department of Commerce, 1987.

Doyle, Pat, and Charles Post. "Development of Uniform Eligibility Measures for SIPP-Based

Cross-Section Files.' Report to Food and Nutrition Service, U.S. Department of

Agriculture. Washington, D.C.: Mathematica Policy Research, Inc., 1988.

Doyle, Pat, and Carole Trippe. "Validation of the Food Stamp Microsimulation

Model." Report prepared for the Food and Nutrition Service, USDA.

Washington, D.C.: Mathematica Policy Research, Inc., 1989.

Landa, Cady. Implications of Food Stamp Program Unit Rules: Evidence from SIPP. Final

report to Food and Nutrition Service, U.S. Department of Agriculture. Washington,

D.C.: Mathematica Policy Research, Inc., 1987.

Mathematica Policy Research, Inc. Survey of Income and Program Participation 1984 Panel

Wave 7 and 1985 Panel Wave 3 August Eligibility File Technical Specification. Report

to the Food and Nutrition Service, U.S. Department of Agriculture. Washington, D.C.:

Mathematica Policy Research, Inc., 1990.

Short, Kathleen and Edith MCArthur. 'Life Events and Sample Attrition in the Survey of

Income and Program Participation.' Proceedings of the American Statistical

Association. Alexandria, VA: American Statistical Association, 1985.

Shiels, John F., Butt S. Bamow, Katherine A. Chanrette and Jill M. Constantine.

__,lderly Persons Eligible For and Participating in the Supplemental Security

Income (SSI) Program." Vienna, VA: Lewin/ICF, 1990.

Trippe, Carole. _.stimating Rates of Participation in the Food Stamp Program: A Review of

the Literature." Current Perspectives on Food Stamp Program Participation.

Alexandria, VA: Food and Nutrition Service, U. S. Department of Agriculture, 1989.

33
U.S. Department of Agriculture, Food and Nutrition Service, Office of Analysis and

Evaluation. Characteristics of Food Stamp Households: August 1985. Alexandria,

VA: Food and Nutrition Service, U.S. Department of Agriculture, 1987.

U.S. Department of Commerce, Bureau of the Comus.. 'Money Income and Poverty

Status in the United States: 1988 (Advanced data fxom the March 1989 Current

Population Survey)' Current Population Repons, Series P-60, No. 166.

Washington, D.C.: U.S. Government Printing Office, 1989.

U.S. Department of Commerce, Bureau of the Census. 'Survey of Income and Program

Participation Users' Guide.' Washington, D.C.: U. S. Bureau of the Census, U.S.

Department of Commerce, 1987.

U.S. Department of Commerce, Bureau of the Census. 'Economic Characteristics of

Households in the United States: Third Quarter 1984.' Current Population Reports,

series P-70, no. 5. Washington, D.C.: U.S. Government Printing Office, 1985.

34
APPENDIX

TECHNICAL PROCEDURES USED TO COMPUTE PARTICIPATION RATES

As noted in the text, the participation rates developed for this study were derived from

a comparison of administrative data on program participation to survey data on program

eligibles. This appendix provides detailed information .on how the numerators and the

denominators were constructed.

A. USING ADMINISTRATIVE DATA TO ESTIMATE THE NUMBER OF

PARTICIPANTS

One source of the disparities in the previous estimates of FSP participation rates, as

noted earlier, has been the use of household survey respondents' reports of their own

participation--data known to be substantially underreported. For example, the U.S.

Department of Commerce (1989) estimated that only 76 percent of the households receiving

food stamps in 1988 reported that receipt in the March 1989 CPS.

The estimates of the numerator in the rates reported here are based on administrative

data derived from three sources. The first source is the Program Operations data which

contain information on the number of persons and households issued benefits and the total

dollar value of the coupons issued for August 1985. The Program Operations statistics are

presented by state, allowing ns to adjust the totals to estimate the caseload residing in the 50

states and the District of Columbia, the population reflected in SIPP.

The second data source is the Integrated Quality Control System (IQCS). This was

used to adjust the Program Operations statistics to eliminate ineligible participants and

erroneous benefits which cannot be captured in the estimation of eligibility using SIPP. The

number of participating households in FY 1985 Program Operations data was adjusted

downward by 3.67 percent to eliminate ineligible households that were not included in the

SIPP-based denominators of the participation rates. Similarly, total benefits reported in the

37
Program Operations data were reduced by the proportion of benefits issued in error to these

ineligible households (6.02 percent)?

The third data source is a sample of food stamp case records from July and August

1985 IQCS samples. This sample of case records was used to calculate the distribution of

persons, households, and benefits across various demographic and economic characteristics.

B. USING SIPP TO ESTIMATE THE NUMBER OF ELIGIBLES

Our estimation of the FSP-eligible population in August 1985 involved several stages.

First, using SIPP data, we developed an analysis file reflecting the U.S. population as of

August 1985. We then used this file to simulate program eligibility, a process whereby we

quantified the program rules defined in the Chapter H and applied them to each dwelling unit

in the data base. For each dwelling unit we also estimated its composition, eligibility status,

and potential benefits. Section 1 summarizes our development of the analysis file, and section

2 assesses the outcome of the eligibility simulation.

1. Development of the Analysis File

SIPP is a nationally representative longitudinal survey of adults in the United States

that provides detailed monthly information on income, program participation, and wealth. It

is a multipanel longitudinal survey to which replacement panels are added each year. At the

time of this study, only data from the first two (1984 and 1985) panels were available. Each

panel contains information on persons in a longitudinal sample followed for a period of over

two and one-haft years. The longitudinal sample is composed of adults, ages 15 or older,

residing in a cross-sectional sample of dwelling units in the United States. These adults, along

17Total benefits could have been further adjusted to account for benefits issued incorrectly to

eligible households (both over- and underpayments). However, this adjustment would have had no

practical effect became the overpayment and underpayment rates virtually offset each other.

Because the difference is trivial, and a strong conceptual basis for making the additional adjustment

was lacking, we elected to adjust only for benefits paid to ineligible households.

38
with other individuals with whom they resided, were interviewed every four months. In each

round of interviewing (or wave), a core questionnaire collected information on each of the

four months preening the interview date. In most waves, the monthly core questions were

supplemented with questions on a variety of topical issues that varied from wave to wave.

Because the interviewing process was staggered, the reference period covered in any given

wave was not the same for all sample members?

Although the survey is longitudinal, it is designed to support cross-sectional estimation

for Census households residing in the 50 states and the District of Columbia. For this

analysis, cross-sectional estimates of food stamp-eligible households were derived from Wave 7

of the 1984 panel and Wave 3 of the 1985 panel, each of which was combined with

information collected in other selected waves of the respective panels. Although Wave 7 of

the 1984 panel and Wave 3 of the 1985 panel were independent samples of the U.S.

population, they were admlni.qtered simultaneously. Furthermore, a straightforward

adjustment to the sample weights allowed estimates to be based on combined panels.

These two waves were chosen for the following reasons: (1) they sampled the

population in the month of August, making the reference period comparable to the

admini.qtrative data used for the numerator; (2) they contain topical information on assets; and

(3) together, they provide a relatively large sample size (27,660 households). The integration

of data fi'om the other waves within each panel was necessary because Waves 7 and 3 do not

contain selected information needed to estimate food stamp eligibility. Although they do

contain measures of monthly income, monthly Census household composition, and assets, they

do not contain measures of medical, child care and shelter expenses, and the information

lSFor further information on the design and scope of SIPP, see U.S. Department of Commerce

(2987).

39
needed to determine disabilitystatus is incomplete. The omissions were corrected in the

following way:

· Out-of-pocket medical expenses were imputed based on data fi.om the

Consumer Expenditure Survey.

· Child care expenses were linked to Wave 7 of the 1984 Panel from Wave

5 and to Wave 3 of the 1985 Panel from Wave 4 using procedures

designed to compensate for changes in circumstances that might have

occurred within each panel.

· Shelter eapenses were linked to Wave 7 of the 1984 Panel fi.om Wave 4

of that panel accounting for changes in circumstances over time. Due to

their omission in the 1985 panel, shelter expenses were imputed to Wave

3 of the 1985 panel based on data fi.om Wave 4 of the 1984 panel.

· Disability status was linked from Wave 1 of the respective panels.

Mathematica Policy Research, Inc. (1990) descrll>es in more detail the development of the

analysis file used in the simulation of the FSP.

2. An Assessment of the Eligl'biliW Simulation

In brief, the procedure used to estimate the eligl31e population was designed to

replicate, as closely as possible given the data !imitatious outlined below, the eUgibility

determination process for each individual or household on the SIPP analysis file. In other

words, the program eligibility and benefit criteria outlined above were applied to each

household as if it had actually applied for food stamps.

Although SIPP contains more information on the variables involved in determining FSP

eligibility and benefits than does any other household survey available, problems still remain.

The simulation procedures described above cannot perfectly replicate the eligibility and

benefit determination process mandated in the legislation, despite the adjustments and

enhancements made to the SIPP data. Specific discrepancies are summarized below.

4O
· Unit definition: Because SIPP does not measure the complete set of

characteristics used in determining a food stamp unit, especially

information on which dwelling unit members customarily purchase and

prepare food together, the simulated food stamp household is not the

same as the unit determined by the food st.ampcase worker. For this

study, the reported program unit composition in Census households with

reported benefits was used to simulate the food stamp household. In

other dwelling units with cash assistance, the food stamp household was

equal to the cash assistance unit, plus any spouses or related children

under age 18 in the dwelling. In all other dwelling units, the simulated

food stamp household was the same as the Census household. Issues

affecting the construction of food stamp households in SIPP are

described in Landa (1987) and Doyle and Dalrymple (1987).

· Countable assets: The financial, nonfinancial, and vehicular assets

reported in SIPP were used to estimate countable assets, according to

program rules. SIPP does not explicitly measure, however, all of the

information needed for this purpose, such as cash on hand.

Furthermore, persons not present at the time of the interview are

assumed to have no vehicular assets.

· Gross income: The measure of gross income employed for this study is

close to, but not precisely the same as, gross income reported to the food

stamp case worker. First, survey data on income and program

participation, such as the data collected in SIPP, tend to be

underreportexL For example, the number of recipients of AFDC benefits

in SIPP was only 82 percent of an independent estimate derived fi'om

administrative data; the number of recipients of unemployment

compensation was 79 percent of the benchmark; and the number of

recipients of veterans' benefits was 90 percent of the benchmark CLI.S.

Department of Commerce, 1985). Second, the definition of income for

purposes of food stamp eligibility is not precisely the same as income

measured in SIPP. For example, the Food Stamp Program counts net

self-employment earnings averaged over a period of up to one year,

whereas SlPP measures self-employment draw. Third, as noted above,

unit composition, as simulated with SIPP data, differs from the case

worker's determination of the food stamp household, and, hence,

aggregated income for the food stamp household may differ as well.

· Net income: The use of approximated medical expenses for elderly and

disabled individuals, the use of approximated shelter expenses for

individuals in the 1985 panel, and measurement error in the collection of

shelter and child care expenses in SIPP will cause some distortion of

simulated net income. The SIPP definitions of shelter and dependent

care expenses also differ slightly from the FSP definitions. For example,

expenses incurred for the care of incapacitated adults are not included in

the dependent care expenses in SIPP, and small amounts of shelter costs,

such as water bills, are omitted.

41
· Disability status: The determination of disability status relied on

reported disability and reported income receipts, as specified under the

program. Reporting and measurement errors in SI]aP may result in some

distortion of the number of disabled individuals identified in this manner.

· Measurement error: Several forms of nonsampling errors affect the

eligibility simulation, including the underreporting of income and

program participation noted above; and the misclassification of benefit

and income types.

The possible bias resulting from each of these measurement and reporting errors is

shown in Figure A-1. The net result on estimates of the number of eligibles is uncertain.

Underreporting of gross income will bias the estimates of eligible households upward, since

more households will appear to have met the income limits than actually did. On the other

hand, the omission of some types of expenses may bias the measurement of net income

upward, thus decreasing the estimate of the number of eligible households. However, the

inability to perfectly replicate program regulations in the calculation of deductions from

expenses may result in the reverse effect. Furthermore, selected assets are omitted from our

analysis file (for example, persons not present at the time of the interview have zero imputed

vehicular assets), thus overestimating the size of the eligible population.

Finally, the underrepfesentation of some groups of individuals biases the estimates of

eligibles downward. As illustrated above, the SIPP data seem to underrepresent sionificantly

households receiving public assistance. These households form a large portion of the eligible

and participating populations. As a result, some of the participation rate estimates for these

households exceed 100 percent.

C. IMPACT OF MEASUREMENT AND REPORTING ERRORS

While we cannot directly assess the full impact of the measurement and reporting

errors, discussed in the previous section, some indications of the magnitude of the problems

can be summarized by comparing the methodology of the study by Doyle and Beebout (1988),

42
FIGURE A-1

Factors Affecting The Simulation Of Food Stamp

Eligibility With SIPP And The

Direction Of The Bias

Effect on Estimates of

Source of Error the Number of Eligibles

Unit Definition Underestimate

Countable Assets Overestimate

Gross Income

Underreporting Overestimate

Definition Underestimate

Program participation Underestimate of eligibles

underreporting and participating in other

misreporting programs

Net Income Unknown

Disability Status Underestimate

Measurement Error Unknown

43
which produced estimates of participation rates in August 1984, and that of this study. There

are three areas which can be examined explicitly: (1) the impact of correcting the

administrative data for benefits issued in error, (2) the impact of sampling and nonsampling

errors on the determination of FSP participation rates, and (3) the impact of the methods for

measuring financial asset balances. Each is discussed in detail below and summarized here.

· The adjustment of administrative data on program caseload by 3.67% and

costs by 6.02% reduces individual and household participation rates by 2

percentage points and reduces benefit rates by 4 percentage points.

· There appears to be a bias in the SIPP data associated with the number

of times respondents have been contacted. Participation rates estimated

solely in Wave 7 of the 1984 Panel are consistently higher than rates

estimated solely on Wave 3 of the 1985 Panel. The combined panel

estimation used in this report reduces this bias.

· The change in procedures used to measure financial asset balances

between the August 1984 study and the current study increased the

household participation rate. Both the 1984 and 1985 methodologies

were applied to Wave 7 and the household Participation rate was 2

percentage points higher using the 1985 methodology. The impact was

strongest among households with no income, for whom the rate was 7

percentage points higher using the later methodology.

These methodological and sampling issues prohibit direct comparison between the

August 1985 participation rates reported in Chapter HI and the rates reported for August

1984 in Doyle and Beebout (1988). However, some patterns can be discerned, and are

highlighted in the report where appropriate.

1. Comparison Of Participation Rates Before And After Adjustment Of Program

Operations Data For Errors In Issuance

Participation rate estimates presented in the body of this report reflect total caseload

and benefits derived from Program Operations data for August 1985, adjusted for errors in

issuance. The number of participating households and persons was reduced by 3.67 percent to

account for ineligible households to whom benefits had been issued in error. Total benefits

44
were reduced by 6.02 percent to account for benefits issued to those households. Tables A-1

through A-3 list the rates which would have been computed had the adjustment to thc

numerators not been made. These are compared to the actual rates incorporated into the

body of the text.

2. Impact Of Samolint And Nonsamplin_, Errors On Estimates Of The Number Of Food

Stamp Eligibles

Eligible households, persons, and benefits were estimated using microsimulation

techniques on a sample of the U.S. population. Therefore, they are subject to both sampling

and nonsampling errors. Sampling errors of the simulation estimates are difficult to estimate

due to the existence of several stochastic procedures imbedded within the model. For

example, medical expenses are imputed to the observations using a predictive model with a

random error term drawn from a normal diatn'bution. Measures of nonsampling errors are

equally difficult to quantify. However, we can provide an indication of the range in estimates

attributed to sampling and selected forms of nonsampling error because the underlying

analysis file was developed through the combination of two independent samples of the

population: Wave 7 of the 1984 Panel and Wave 3 of the 1985 Panel.

In this section we provide estimates of eligibles and participation rates based on three

samples-Wave 7 alone, Wave 3 alone, and the two waves combined. Each set of estimates

was developed in exactly the same manner, the only difference being the underlying data.

Estimates of the numerator of the participation rates are the same as the numerators used in

the body of this report. Estimates of eligibles from the three samples were simulated using

the same model. Table A4 compares the three outcomes.

Overall, the participation rates vary by 1 to 5 percentage points. The household rate

shows the least amount of variation, ranging from 58 percent based on Wave 3 alone to 59

percent for Wave 7 and for Waves 3 and 7 combined. The most variation occurs in the

45
TABLEA1

HouseholdParticipationRates

by Selected Household Characteristics,

Unadjustedand Adjustedfor Errors in Issuance,

August 1985

ParticipationRates

Adjusted by

Reducing the Numerator

Unadjusted By 3.67_

Text Table 2:

HouseholdSize

1 51.6_ 49.8%

2 64.1 61.8

3 73.0 70.3

4 68.3 65.8

5 63.9 61.5

6+ 77.1 74.3

Total

Text Table 4:

HouseholdsContaining:

Elderly 38.7_ 37.3_

Disabled 48.5 46.7

ChildrenUnderAge18 76.7 73.9

ChildrenAges5 to17 77.5 74.7

Single Female

WithChildren 77.7 74.8

Single Male

WithChildren 47.6 45.8

Two or More Adults

With Children 78.2 75.3

WhiteNonhispanicHead 50.8 48.9

BlackNonhispanicHead 80.0 77.1

Hispanic Head 56.9 54.8

Text Table 6:

Households by Benefit

Level

<=10 28.3% 27.3%

11-25 45.6 43.9

26-50 46.8 45.1

51-75 62.9 60.6

76-100 70.2 67.6

101-150 75.5 72.7

151-200 91.0 87.7

201+ 89.9 86.6

46
Table A1 (Continued)

Participation Rates

AdjUsted by

Reducing the Numerator

Unadjusted By 3.67_

Text Table 8:

Households by Income

As Percent of Poverty

<:100 77.4% 74.6_

0 71.7 69.0

1-50 96.2 92.7

51-100 69.7 67.2

>100 15.4 14.8

101-130 15.8 15.2

131+ 11.1 10.7

Text Table 10:

Householdsby Income Source

Earnings 38.2% 36.8%

SSI:

Elderly 69.1 66.6

NoElderly 66.5 64.1

TotalSSI 68.2 65.7

PublicAssistance 119.9 115.5

AFDC 123.0 118.5

OtherWelfare 101.1 97.4

Unemployment

Compensation 78.5 75.6

Source: Participation rates are computed as the ratio of participants to

eligibles. Unadjusted participantcounts are from the Food Stamp

Program Statistical Summary of Operations. Adjusted participant

counts are also from the Food Stamp Program Statistical Summary of

Operations but they were reduced by 3.67 percent to reflect the

proportion of ineligible households issued benefits in error.

Estimatesof eligibleswere derivedfrom specialtables preparedusing

the August 1985 analysis file developed from SIPP, 1984 and 1985

panels. The SIPP analysis file contains 27,660 households in total

and 3,559 households eligible for food stamps.

47
TABLEA2

Individual Participation Rates

by Selected Characteristics,

Unadjusted and Adjusted for Errors in Issuance,

August 1985

ParticipationRates

Adjusted by

Reducingthe Numerator

Unadjusted By 3.67%

Text Table 3:

Individuals by Demographic

Characteristics

ElderlyLivingAlone 42.8% 41.3%

Disabled Living Alone 54.4 52.4

ElderlyNotAlone 31.5 30.4

Disabled Not Alone 46.5 44.8

ElderlyTotal 38.0 36.6

DisabledTotal 49.3 47.4

ChildrenUnderAge18 76.3 73.5

ChildrenUnderAge6 78.1 75.3

ChildrenAges 5 to 17 75.5 72.7

AdultsAges18to59 67.4 65.0

Total Persons 66.7 64.3

Text Table 7:

IncomeAs Percent of Poverty

<=100 81.7% 78.7

0 72.3 69.7

1-50 95.5 92.0

51-100 74.7 71.9

>100 18.2 17.5

101-130 18.5 17.9

131+ 12.7 12.3

Source: Participation rates are computed as the ratio of participants to

eligibles. Unadjusted participantcounts are from the Food Stamp

Program Statistical Summary of Operations. Adjusted participant

counts are also from the Food Stamp Program StatisticalSummary of

Operations but they were reduced by 3.67 percent to reflect the

proportion of ineligible households issued benefits in error.

Estimatesof eligibleswere derivedfrom specialtables preparedusing

the August 1985 analysis file developed from SIPP, 1984 and 1985

panels. The SIPP analysis file contains 27,660 households in total

and 3,559 householdseligiblefor food stamps.

48
TABLEA3

BenefitParticipationRates

by SelectedHouseholdCharacteristics,

Unadjustedand Adjustedfor IssuanceErrors,

August1985

ParticipationRates

Adjusted

By Reducingthe

Unadjusted Numeratorby 6.02_

Text Table 5:

Benefitsto HouseholdsContaining:

Elderly 45.5_ 42.7%

Disabled 69.9 65.7

ChildrenUnderAge18 87.6 82.3

ChildrenAges 5 to 17 89.8 84.3

SingleFemalewithChildren 81.0 76.1

SingleMalewith Children 50.5 47.4

Two or More Adults

withChildren 99.8 93.7

WhiteNonhispanicHead 73.2 68.7

BlackNonhispanicHead 92.2 86.6

HispanicHead 65.0 61.0

TextTableg:

Benefitsto Householdsby

IncomeAs Percentof Poverty

<=100 86.2 81.0

0 74.8 70.3

1-50 96.0 90.2

51-100 78.5 73.8

>100 17.4 16.3

101-130 18.0 16.g

130+ 6.8 6.4

Source: Participationrates are computedas the ratio of benefits of

participantsto totalbenefitswhichwould havebeen issuedhad all

eligibles households participated. Unadjusted benefits to

participants are from the Food Stamp Program Statistical Summary of

Operations.Adjustedbenefitsto participantsare alsofromthe Food

Stamp ProgramStatisticalSummaryOperationsbut they were adjusted

down by 6.02 percentto accountfor benefitsissuedin error to

ineligiblehouseholds. Estimatesof eligibleswere derivedfrom

specialtablespreparedusingtheAugust1985analysisfiledeveloped

from SIPP, 1984 and 1985 panels. The SIPP analysisfile contains

27,660 households in total and 3,559 households eligible for food

stamps.

49
TABLEA4

Iml_ct on Sampltngand Nonsmpltng Error on Estimates of

Eligibles and Participation Rates,

August 1985

E11qtbles Participation Rates

Participants Wave3/7 gave 7 Wave3 Wave3/7 gave 7 Wave3

Persons 18560 28884 28669 29666 64.26 64.74 62.56

Households 6894 11604 11589 11821 59.41 59.49 58.32

Benefits 807265 1072262 1045559 1128494 75.29 77.21 71.53

Householdby Size

I 2329 4649 4752 4588 50.09 49.01 50.76

2 1481 2380 2287 2535 62.21 64.74 58.41

3 1217 1718 1770 1687 70.81 68.73 72.11

4 907 1369 1268 1532 66.22 71.49 59.17

5 506 817 833 812 61.92 60.73 62.30

6+ 502 671 680 668 74.82 73.83 75.15

Householdby Income

<-0 475 684 652 744 69.40 72.81 63.81

1-99 135 282 316 266 47.70 42.57 50.57

100-199 662 652 753 541 101.52 87.90 122.34

200-299 1036 1052 1029 1098 98.50 100.70 94.37

300-399 1798 2436 2427 2461 73.83 74.10 73.08

400-499 1021 1921 1908 2014 53.13 53.49 50.68

500-599 684 1647 1682 1612 41.55 40.68 42.45

600-699 440 839 770 909 52.40 57.09 48.36

700-799 226 575 639 495 39.33 35.39 45.69

800-899 170 461 434 515 36.79 39.08 32.93

900-999 104 294 263 337 35.48 39.66 30.95

>-1000 190 761 716 828 24.98 26.55 22.96

50
benefit rates which are 72 percent for Wave 3 and 77 percent for Wave 7. Individual rates

range from 63 to 65 percent.

The range in individual rates is driven by the variation in estimates of the number of

eligible households of size 2 and size 4. Participation rates for households of size 2 for Wave

7 (65 percent) are almost 11 percent higher than the corresponding rates for Wave 3 (58

percent). The difference between the participation rates for households of size 4 is even

more extreme (from 59 to 71 percent).

Household participation rates by level of gross income are highly volatile. While each

set of rates varies in a similar manner by level of income, the actual participation rates are

quite different across waves within each income class. For example, the rates for households

with no income range from 64 percent to 73 percent. It is interesting to note that in most

income classes, Wave 3 rates are lower than Wave 7 rates. There are simply more

low-income, low-asset households in the Wave 3 file than in the Wave 7 file.

While the principal difference between Wave 7 and Wave 3 estimates of eligibles can

be attributed to sampling error, there are some forms of nonsampling error which affect the

outcomes. The first difference is that observations in Wave 7 of the 1984 Panel had been in

the sample more than twice as long as those in Wave 3 of the 1985 Panel. Thus, sample

attrition would affect the Wave 7 estimates more than the Wave 3 estimates because of the

increased length of time from the initial interview. Furthermore, sample attrition has been

shown to be nonrandom (Short and MCArthur, 1985). In particular, low-income households

have a higher attrition rate than middle-income households. This pattern of attrition may

contn'bute to the fact that there are more eligibles from Wave 3 than from Wave 7.

The second difference between Waves 7' and 3 is the methodology employed to

compensate for data not collected in those waves. Neither of these waves contained measures

of child care, shelter or medical expenses, or disability status, as it is defined for the Food

51

fl
Stamp Program. Medical expenses were imputed to both waves using exactly the same

procedures, and thus do not contribute to the differences in estimates of eligibles except for

the randomness associated with the assignment of the error term. However, each of the other

expenses was assigned to the relevant wave using a slightly different method, as discussed

below.

Child care expenses were collected in Wave 5 of the 1984 Panel and Wave 4 of the

1985 Panel. These were linked to Waves 7 and 3 using the procedures discussed in Doyle and

Post (1988). The principal difference in how the data were linked was the timing of the child

care wave relative to the analysis sample. Hence, the ease with which the data could be

integrated varied to some degree. The differences are by no means dramatic. For example, in

Wave 7 of the 1984 Panel, 11 percent of the unweighted sample cases were not interviewed in

Wave 5, and thus child care expenses were imputed. In contrast, 23 percent of the

unweighted sample cases in Wave 3 of the 1985 panel were not interviewed in Wave 4 when

the child care topical module was administered.

Shelter expenses were collected in Wave 4 of the 1984 panel, but were not collected at

all in the 1985 Panel Hence, we had to impute these expenses to all households in Wave 3.

In the 1984 panel, we needed only to impute expenses to 38 percent of the cases because the

remaining cases were present in both Waves 4 and 7 and did not change addresses.

Therefore, estimates of the shelter deduction are subject to more error in Wave 3 than in

Wave 7.

Disability status is a function of income available in both Waves 7 and 3, as well as

reasons for receiving benefits from certain program.% which is determined during the first

interview. The difference in the timing of each wave relative to the first interview is more

than one year, and, hence, there is more error in the determination of disability status in

Wave 7 than in Wave 3.

52

f
3. Impact Of Asset Measures On Estimates Of Eligibles And Participation Rates

The estimates of food stamp eligibles in 1984 and 1985 are not directly comparable

because of a difference in the procedure used to construct countable assets. Hence, estimates

of the participation rates between the two years will appear to vary in some instances where

in fact they are comparable. In this section of the appendix, we provide an analysis of the

impact of the change in participation rates attnbuted to the change in procedures for

determining asset balances. This analysis is based solely on Wave 7 1984 panel; thus, rates

used differ from the participation rates in the body of this report.

The method of determining assets in estimating 1984 participation rates was to

construct estimates of nonvehicular assets by dividing asset income by an assumed rate of

return on investment and then combine the results with countable vehicular assets. 19 The

method of determining assets in estimating 1985 participation rates was to accumulate the

countable value of reported balances in income- and non-income-producing nonvehicular

assets and combine that with countable vehicular assets. Hence, the difference in methods

lies in the treatment of nonvehicular assets. Both methods were applied to the observations

in Wave 7 and the results are compared in Table AS.

Overall, the impact of the change in asset procedures was to decrease the number of

eligl_les and increase the participation rate. In particular, the procedure used in 1984 tended

to understate the amount of countable financial assets held by the low-income population.

This is not unexpected given that the rate of return used to estimate asset balances was an

average over the entire population rather than an average appropriate for the low-income

population.

l_'here was an adjustment of the balances recorded in the original SIPP data file in cases of

item nonresponse. The Census Bureau developed imputed data for these items but an analysis of

the quality of those data indicated that the imputations did not perform well for the low-income

population. Hence, these values were reimputed as described in Mathematica Policy Research, Inc.

OOO0).

53
TABLEA5

Iwact of Asset Neasureson Esttmtes of Eligibles

and Participation Rates,

August 1985

Eligibles Participation Rate

Wave7 Wave7 Wave7 Wave7

Participants Final ROR' Final ROR

Persons 18560 28669 29613 64.74 62.67

Households 6894 11589 12037 59.49 57.28

Benefits 807265 1045559 1070891 77.21 75.38

f,

Householdby Stze "

1 2329 4752 4962 49.01 46.93

2 1481 2287 2399 64.74 61.72

3 1217 1770 1814 68.73 67.06

4 907 1268 1308 71.49 69.31

5 506 833 854 60.73 59.24

6+ 502 680 699 73.83 71.82

Householdby Income

<-0 475 652 720 72.81 65.93

1-99 135 316 309 42.57 43.53

100-199 662 753 740 87.90 89,44

200-299 1036 1029 1083 100.70 95,68

300-399 1798 2427 2452 74.10 73.35

400-499 1021 1908 1995 53.49 51,16

500-599 684 1682 1759 40.68 38.90

600-699 440 770 791 57.09 55,58

700°799 226 639 674 35.39 33.55

800-899 170 434 455 39.68 37.28

g00-999 104 263 265 39.66 39.36

>-1000 190 716 793 26.55 23.97

lCountable financial assets were esttmted based on assumedrate of return in investment.

Otherwise, eligibility and participation rates were determined in the samemanneras the Wave7,

Ftnal estimates of eligibles and participation rates.

54
The impact was fairly uniform across all three measures (all three participation rates

computed using the 1985 procedures were 2 percentage points higher than the rates

computed using the 1984 procedures). The rates did not change drastically for any household

size group, and the changes in rates by income class were mixed. The participation rate

among eligible households with no income rose by 7 percentage points when the methodology

was changed from the 1984 to 1985 procedures. This is disproportionate in comparison to

other income classes, except the $200 to $299 class, where the rate rose 5 percentage points.

In all other income classes, rates only changed by one to two points.

55