SUMMARY OF FINDINGS

TRENDS IN FOOD STAMP PROGRAM PARTICIPATION RATES: 1976 - 1990

This study is the first to use a consistent data source and

methodology to estimate participation rates--the ratio of the

number of program participants to the number of eligibles--over a

long period of time. The report uses estimates of program

participants from Food Stamp Program (FSP) administrative data

and estimates of the number of eligibles derived from the Current

Population Survey (CPS).

The CPS is the only source of information to estimate FSP

eligibles over many years, but it consistently underestimates

both the number of participants and participation rates. Other

FNS reports give more accurate measures of rates at specific

points in time, but cannot support an historical comparison of

rates over a long period. The objective of this report is to

establish the context of long-term changes in program

participation rates; thus, the focus is on overall trends rather

than levels.

The report presents rates for every other year from 1976 to 1990

and examines the major causes of changes in the rates during this

time period. Findings include:

o Program participation rates increased somewhat between 1976

and 1978 due to changes in the economy lowering the number

of eligibles and, to a lesser extent, the number of

participants.

o Rates increased substantially from 1978 to 1980 due to

elimination of the purchase requirement (which increased the

number of participants) and implementation of more

restrictive program rules (which reduced the nuhmber of

eligibles) under the Food Security Act of 1977.

o From 1980 to 1982, rates decreased slightly due to the

economic recession raising the number of eligibles.

o Rates were unchanged from 1982 to 1984.

o From 1984 to 1986, participation rates decreased slightly

due to the more generous eligibility criteria implemented

under the Food Security Act of 1985. The new criteria

immediately increased the number of eligibles, but the newly

eligible population did not respond by joining the program.

o Rates held steady from 1986 to 1988.

o Rates increased from 1988 to 1990 due to an increase in the

number of participants with little change in the number of

eligibles. This rise in participation rates reflects the

surge in FSP participation that began in 1989.
MATHEMATICA

Policy Research, Inc.

600 Mar/land Ave., SW, Suite 550

7925-020 Washington, DC 20024-2512

TEL (202) 484-9220

MEMORANDUM FAX(202)863-1763

TO: Lola Staples

FROM: Nancy Heiser _'' DATE: 05/06/93

SUBJECT: Unbound Copy of the Report "Trends in Food Stamp Program Participation Rates:

1976 to 1990"

Contract No.: 53-3198-0-22-587

I have enclosed an unbound copy of the report entitled "Trends in Food Stamp Program

Participation Rates: 1976 to 1990".

cc: H. Beebout

C. Trippe

J. Sykes

J. DiCarlo

A. Landey

An Affirmative Act/on/Equal OpporttmJty Employer
('i_ CurrentPerspectiveson FoodStampProgramParticipation

United States

TrendinsFoodStampProgram

Analysis and ParticipatoinRates:

E..,u.,, 1976 o. to 1990
CurrentPerspectiveson FoodStampProgramParticipation

Titles in this series:

FoodStampProgramParticipationRates

(November1988) Pat DoyleandHaroldBeebout

Food StampProgramParticipationRatesAmongthe Poverty

Population,1980-1987

(November1988) CaroleTrippeandHaroldBeebout

Determinantsof Participationin the Food StampProgram:

A Reviewof the Literature

(November1989) SusanAllinandHaroldBeebout

Estimating Ratesof Participationin the FoodStampProgram:

A Reviewof the Literature

(November1989) CaroleTrippe

Food StampProgramParticipationRates:

August 1985

(April1990) Pat Doyle

The Effectsof Food Stampson Food Consumption:

A Reviewof the Literature

(October1990) ThomasM. Fraker

Participation in the Food StampProgram:

A MultivariateAnalysis

(March1992) AlbertoMartini

Food StampProgramParticipation Rates:

January 1988

(February1992) Carole TrippeandPat Doyle

Trends in Food StampProgram

Participation Rates:1976to 1990

(July 1992) CaroleTrippe,Pat DoyleandAndrewAsher

Food StampProgram ParticipationRates:

January 1989

(July1992) Carole Trippeand Pat Doyle

t '
(_ United States Food and 3101 Park Center Drive

Departmentof Nutrition Second Floor

Agriculture Service Alexandria, VA22302

Trendsin FoodStampProgram

ParticipationRates:

1976to 1990

CaroleTrippe, PatDoyleand Andrew Asher

Aproductof

MathematicaPolicyResearchI,nc.

600MarylandAvenue,S.W.

Suite550

WashingtonD, C20024

July 1992
ACKNOWLEDGEMENTS

The authors wish to thank the many people who made this analysis possible. In particular, we

thank Alana Landey, Steven Carlson, and Bob Dalrymple of the Food and Nutrition Service, for their

guidance and review, and for help finding program parameters for the very early years of the

program. Among the talented MPR programmers who developed the many CPS analysis files needed

for the project, we thank Julie Sykes and Ed Hoke. A special note of appreciation goes to Judy

Richter and Cara Hendricks who analyzed all the FSP caseload files, estimated regression equations,

developed spreadsheets to compute participation rates, and helped develop the CPS analysis files.

We also thank Harold Beebout, who provided very helpful comments on all drafts of the report.

Finally, but not least, we thank Tom Good for his careful editing, and Sheana Carter, Chiquita Payne,

and Bob Skinner for preparing the report.

MPR Project Number: 7925-036

FNS Contract Number: 53-3198-0-22

FNS Project Officer: Alana Landey

This work was prepared as one task of a competitively awarded contract; the total amount of the

contract is $2,854,698.
CONTENTS

Chapter Page

FOREWORD .......................................................... ix

EXECUTIVE SUMMARY ................................................ xi

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

II A REVIEW OF THE RESEARCH ON PARTICIPATION

RATES IN THE FOOD STAMP PROGRAM AND OTHER

WELFARE PROGRAMS ....................................... 5

A. FOOD STAMP PARTICIPATION RATES ....................... 5

1. Data on Participants ...................................... 7

2. Data on Eligibility........................................ 8

B. THREE EXISTING TIME-SERIES STUDIES .................... 9

C. EXAMINING PARTICIPATION RATES IN THE SSI

AND AFDC PROGRAMS ................................... 11

1. SSI Participation Rates from 1975 to 1987 ..................... 11

2. AFDC Participation Rates from 1973 to 1984 ................... 11

III METHODOLOGY ............................................ 15

A. MEASURING FOOD STAMP PROGRAM PARTICIPANTS ........ 15

B. MEASURING FOOD STAMP PROGRAM ELIGIBLES ............ 16

1. Eligibility Criteria Prior to the Food Stamp Act of 1977 ........... 17

2. Eligibility Criteria After the Food Stamp Act of 1977 ............. 18

3. Methods for Estimating the Missing or Incomplete

Information in the CPS .................................... 20

IV FSP PARTICIPATION RATES: 1976 TO 1990 ...................... 23

A. TRENDS IN AGGREGATE FSP PARTICIPATION RATES ......... 23

B. TRENDS IN PARTICIPATION RATES BY SELECTED

DEMOGRAPHIC AND ECONOMIC CHARACTERISTICS ......... 26

1. Trends by Demographic Characteristics ........................ 26

2. Trends by Economic Characteristics .......................... 34

°..

111
CONTENTS (continued)

ChapterV Page

V CAUSES OF THE TRENDS IN FSP PARTICIPATION RATES ......... 41

A. CHANGES IN FSP LEGISLATION ............................ 41

1. Food Stamp Act of 1977 ................................... 43

2. OBRA of 1981 .......................................... 44

3. 1985Food SecurityAct ................................... 45

4. The Homeless Assistance Act ............................... 46

5. Immigration Legislation ................................... 47

B. SHIFTS IN ECONOMIC CONDITIONS ......................... 47

1. Rising Inflation and Strengthening Economy

Between 1976 and 1978 ................................... 48

2. Weakening Economy between 1978 and 1980 ................... 49

3. Recession between 1980 and 1982 ........................... 49

4. Recovery between 1984 and 1986 ............................ 51

5. Weakening Economy In 1990 ............................... 51

C. CHANGES IN OTHER PROGRAMS CLOSELY ASSOCIATED

WITH THE FSP ........................................... 52

1. Expansions in Medicaid ................................... 52

2. Indexing of Supplemental Security Income and Social

Security Benefits ......................................... 53

3. AFDC Program ......................................... 53

D. SUMMARY ............................................... 54

REFERENCES ........................................................ 57

APPENDIX A: TECHNICAL PROCEDURES USED TO COMPUTE

ELIGIBLE PERSONS, HOUSEHOLDS, AND BENEFITS ........ 59

APPENDIX B: SELECTED FEATURES OF THE FOOD STAMP PROGRAM

UNDER PAST AND CURRENT LEGISLATION ............... 77

APPENDIX C: UNWEIGHTED SAMPLE SIZES FOR THE CASE

RECORD SURVEYS AND UNWEIGHTED SAMPLE

SIZES FOR THE CPS ..................................... 83

iv
TABLES

Table Page

II.1 INDMDUAL, HOUSEHOLD, AND BENEFIT RATES OF FOOD

STAMP PROGRAM PARTICIPATION .................................... 6

II.2 SSI PARTICIPATION RATES ESTIMATED BY SHELLS ET AL.

WITH CPSDATA ................................................... 12

II.3 AFDC PARTICIPATION RATES ESTIMATED BY RUGGLES AND

MICHEL WITH CPS DATA ........................................... I3

IV.1 MONTHLY NUMBER OF ELIGIBLES AND PARTICIPANTS AND

PARTICIPATION RATES FOR INDIVIDUALS, HOUSEHOLDS,

AND BENEFITS: 1976-1990 ........................................... 24

IV.2 HOUSEHOLD PARTICIPATION RATES BY HOUSEHOLD SIZE:

1976-1990.......................................................... 27

IV.3 INDMDUAL PARTICIPATION RATES BY SELECTED DEMOGRAPHIC CHARACTERISTICS: 1976-1990 ............................... 30

IV.4 INDIVIDUAL PARTICIPATION RATES BY SELECTED ECONOMIC

CHARACTERISTICS: 1976-1990 ....................................... 35

V.1 SUMMARY OF MAJOR INFLUENCES ON FSP PARTICIPATION

RATES: 1976to 1990 ................................................ 42

v
FIGURES

Figure Page

IV.1 FSP MONTHLY PARTICIPATION RATES: 1976-90 ........................ 25

IV.2 PARTICIPATION RATES BY HOUSEHOLD SIZE ......................... 28

IV.3 PARTICIPATION RATES BY AGE ..................................... 31

IV.4 PARTICIPATION RATES BY HOUSEHOLD COMPOSITION ................ 33

IV.5 PARTICIPATION RATES BY SELECTED ECONOMIC

CHARACTERISTICS ................................................ 36

IV.6 PARTICIPATION RATES BY FSP BENEFIT LEVELS AS A

PERCENT OF MAXIMUM BENEFIT ................................... 38

V.1 NUMBER OF ELIGIBLES, PARTICIPANTS AND

UNEMPLOYED PERSONS ............................................ 50

vii
FOREWORD

The Food and Nutrition Service (FNS) has a keen interest in the extent to which Food

Stamp Program (FSP) benefits reach those who are eligible for them. The participation rate--the

ratio of the number of participants to the number of eligibles--provides a picture of a program's

success in reaching this target population. FNS has published a series of reports on FSP participation

rates which uses data from the Survey of Income and Program Participation (SIPP) to provide

snapshots of rates at specific points in time. SIPP has not existed long enough, however, to give an

accurate picture of changes in participation rates over the life of the FSP. This report uses another

consistent data source and methodology to measure and compare changes in participation rates over

many years and analyzes the causes behind those changes.

This report presents trends in participation rates from 1976 to 1990 based on the Current

Population Survey (CPS). The CPS contains information to estimate the number of FSP eligibles

over many years, but consistently underestimates participation rates. The SIPP-based series of

estimates gives a more accurate measure of participation rates at particular points in time since 1984,

but cannot support an historical comparison of rates over a longer period. Our objective in

sponsoring this research was to establish the context of long-term changes in program participation

rates. Thus, the focus of the report is on overall trends rather than levels.

In addition to giving an historic overview of the trends in rates over time, this report provides

important new information as well. A previous report in this series, Food Stamp Program

Participation Rates: January_ 1988, found a small but noticeable decline in the participation rate from

August 1985 (the prior period for which rates were estimated) to January 1988. This report found

a similar decline between those years, but then finds a reversal of the decline with a significant

increase from 1988 to 1990.

These new data help us add the latest piece to the picture of recent influences on FSP

participation. Analyses showed that the August 1985-to-January 1988 drop in the overall

participation rate was due to low participation among those made newly eligible for the FSP by the

Food Security Act of 1985 (implemented in 1986). However, over seven million new participants

have joined the program since January 1988. We would expect to see a rise in participation rates if

these new participants were previously nonparticipating eligibles. The upward trend in participation

rates from 1988 to 1990 documented in this report is indeed due to the combined effect of increasing

numbers of participants and steady numbers of eligibles.

If this pattern of previously nonparticipating eligibles joining the program continues, we may see

further increases in participation rates in the future. The next SIPP-based estimate of participation

rates (for January 1992) should be available in late 1993. This will offer the first concrete evidence,

using the best possible data for estimating eligibility, of the effect of recent program growth on

program participation rates.

Office of Analysis and Evaluation

Food and Nutrition Service, USDA

July 1992

ix
EXECUTIVE SUMMARY

The Food Stamp Program (FSP) helps low-income families and individuals purchase the food

they need to maintain a nutritious diet. The FSP provides assistance to all financially needy

households without requiring that the household contain certain groups of persons, such as children

or elderly persons. However, persons must apply for and be financially eligible for food stamps in

order to receive them. Since some financially eligible persons do not apply for food stamps, the

participation rate--the ratio of the number of participants to the number of eligibles--is less than 100

percent.

The most recent estimate is that approximately 59 percent of persons eligible for the FSP

participated in the program in January 1988 (Trippe and Doyle, 1992). While it is unreasonable to

expect 100 percent participation among the eligible population, policymakers and other interested

parties need to know how the rate of participation has changed over time in order to address two

important questions: Has the program reached more or less of its target population in recent years

relative to earlier years? And how has participation among the subgroups of the eligible population

varied over time? Examining the trends in participation rates indicates the program's relative success

at reaching the eligible population.

This study uses a consistent data source and methodology to estimate participation rates over the

past 15 years. Specifically, it uses data from the March Current Population Survey (CPS) to estimate

the number of eligibles, and FSP administrative data to estimate the number of part/c/pants. With

these data, we have produced participation rates for every other year from 1976 to 1990. The study

also examines the major causes of the changes in the rates over the 15 years. In particular, it

examines the influence of changes in FSP legislation, changes in the economy, and changes in other

assistance programs on the participation rates.

The study finds that FSP participation rates increased between 1976 and 1978 due to changes

in the economy, and increased substantially between 1978 and 1980 due to changes made to the FSP

program under the 1977 Food Stamp Act. The 1977 Act, implemented in late 1978 and early 1979,

increased the number of participants by making the program accessible to more eligible low-income

households. Participation rates remained relatively constant from 1980 to 1988, but again increased

between 1988 and 1990. The recent increase in participation rates is due to the surge in FSP

participation which began in early 1989.

PURPOSE OF THE ANALYSIS

The purpose of this time-series study is to provide a consistent, accurate measure of the trends

in participation rates, rather than to provide the most accurate estimate of any single participationrate level. In fact, the CPS data used in this analysis consistently overestimate the number of eligibles,

and thus substantially underestimate FSP participation rates. More precise SIPP-based estimates of

eligibles have been used to estimate participation rates in August 1984, August 1985, and January

1988. The SIPP-based estimates produce participation rates that are over 10 percentage points higher

than those based on the CPS data used in this report. For example, the more accurate SIPP-based

estimate of the participation rate for individuals in January 1988 is 59 percent, rather than the 49

percent CPS-based estimate reported in this report. However, we used the CPS database in this

analysis because, unlike the SIPP database, it is available for the entire period from 1976 to 1990.

xi
Thus, readers should focus on the trends reported in this report rather than on any specific participation

rate.

TRENDS IN FSP PARTICIPATION RATES: 1976 TO 1990

Participation rates in the FSP increased between 1976 and 1978, and then increased substantially

between 1978 and 1980, as illustrated in Figure 1. Participation rates remained relatively constant

between 1980 and 1988, but again increased between 1988 and 1990. Participation rates for

individuals increased by 7 percentage points between 1976 and 1978, increased by over 16 percentage

points between 1978 and 1980, and changed by no more than 8 percentage points over the entire

period from 1980 to 1988. Participation rates again rose sharply between 1988 and 1990, increasing

by 6 percentage points over two years. Hence, the FSP has reached a much greater proportion of

its target population in the years since 1980 than before 1980, and is reaching more eligible persons

in 1990 than it did in the 1980s.

FSP MONTHLY PARTICIPATION RATES: 1976 to 1990

?o_. [

I BenefitJ

/

/

/ Indi*idu*ls

/

/

/

HouJeholdl

a i I i _ I __

sept llr;e flee Le7tl AuI LeaO AUdi IV&?. AUdi 1964 a_I tam tLUjI i_ma A,ad let_

Month/Year

The figure also shows that the trend in rates was consistent among the three units of measurement:

the benefit rate was consistently higher than the individual rate and the household rate, and the

individual rate was consistently higher than the household rate. This consistent pattern indicates that

households with higher benefit levels, and thus greater need, are more likely to participate than

households with lower benefit levels. It also implies that larger households are more likely to

participate than smaller households.

CAUSES OF THE TRENDS IN FSP PARTICIPATION RATES

Participation rates change when the rate of growth in the number of participants differs from

the rate of growth in the number of eligibles. Changes in FSP legislation, economic conditions, and

other programs affect the rate of growth among participants and eligibles, and thus cause

participation rates to change. Since these influences often occur simultaneously, it is difficult to sort

out their separate effects on participation rates. However, in most cases, one of the influences

dominates the others, causing participation rates to change in a particular direction. The major

influences and their effects on the numbers of participants and eligibles and the consequent

participation rates between 1976 and 1990 are summarized below:

xii
· 1976 to 1978. Participation rates increased by 7 percentage points due to rising

inflation combined with a strengthening economy. Both of these factors caused the

number of eligibles, and to a lesser extent the number of participants, to decline,

resulting in a rise in participation rates.

· 19 78 to 1980. Partt_ipattbn rates increased by over 16percentage points due to changes

made to the FSP under the Food Stamp Act of 1977. Under the 1977 Act, the

number of participants increased due to the elimination of the purchase

requirement, and the number of eligibles declined as a result of restrictive changes

to the program such as capping the income eligibility guidelines, resulting in the

substantial rise in participation rates.

· 1980 to 1982. Participation rates decreased by about 3 percentage points because the

economy was in recession. The number of eligibles increased more than the number

of participants, resulting in a minor drop in participation rates.

· 1982 to 1984. No change in participation rates.

· 1984 to 1986. Participation rates decreased by about 4 percentage points due to the

more generous eligibility criteria introduced under the 1985 Food Security Act. The

expanded eligibility criteria immediately increased the number of eligibles, but the

newly eligible population did not respond by entering the program.

· 1986 to 1988. No change in participation rates.

· 1988 to 1990. Participation rates increased by about 6 percentage points due to an

increase in the number ofparticipants with little change in the number of eligibles. The

number of FSP participants increased due to expansions in the Medicaid program,

legislative changes resulting in simplification of the application process, increased

outreach to the homeless, and increased expedited service, and immigration

legislation granting resident status to selected aliens.

TRENDS BY SELECTED DEMOGRAPHIC AND ECONOMIC CHARACTERISTICS

In most cases, trends for subgroups of the eligible population follow the same patterns as trends

for the total population. However, the rates for the subgroups of persons are consistently higher or

lower than the overall rates for persons, as discussed below.

Trends by Demographic Characteristics

· Household size. Although participation rates for each household size follow the

same general pattern as the rates for all households, smaller households tend to

participate at lower rates than average, and larger households tend to participate

at higher rates than average. However, in almost every year of the analysis,

participation rates peak for households that contain three persons, as found in

other research. Although rates decline with household sizes of more than three

persons, rates for larger households are still higher than the rates for single-person

households.

Xlll
· Age ofpersons in the Household. The trend in participation rates for elderly persons,

children, and adults also closely follows the trend in rates for all persons. However,

the rates for elderly persons are much lower than average, the rates for children

are much higher than average, and the rates for adults are close to average in every

year of the analysis.

· Household compositt3n. The trend in participation rates for persons based on their

household composition moves with the trend for all persons. However, the rates

for single adults with children are much higher than average, and rates for

households without children are much lower than average.

Trends by Economic Characteristics

· Poverty Level. As expected, participation rates in all years were much higher for

persons in households whose gross income was below the poverty level than for

persons in households whose gross income was above the poverty level.

· Income Sources. The pattern of participation rates among persons in households

with earnings are similar to the pattern of rates among all persons, but are much

lower and vary less. The participation rates for persons in households that received

unemployment compensation were also lower than average in all years for which

data were available.

· Benefit Levels. Persons eligible for the lowest benefit levels (between 1 and 25

percent of the maximum benefit) participate at lower rates than persons eligible for

higher benefit levels. In general, participation rates increase as potential benefits

increase. However, persons in households eligible for 100 percent of the maximum

benefit participate at rates below average. This pattern is found in other studies

and is likely due to measurement problems among the highest benefit group.

XiV
I. INTRODUCTION

The Food Stamp Program (FSP) helps low-income families and individuals purchase the food

they need to maintain a nutritious diet. Unlike other assistance programs, such as the Aid to Families

with Dependent Children and the Supplemental Security Income programs, the FSP does not place

categorical restrictions on eligibility and participation. The FSP provides assistance to all financially

needy households without requiring that the household contain certain groups of persons, such as

children or elderly or disabled persons. However, persons must apply for and be financially eligible

for food stamps in order to receive them. Since some financially eligible persons do not apply for

food stamps, the participation rate--the ratio of the number of participants to the number of eligibles--

is less than 100 percent.

The most recent estimate is that approximately 59 percent of persons eligible for the FSP

participated in the program in January 1988 (Trippe and Doyle, 1992). While it is unreasonable to

expect 100 percent participation among the eligible population, policymakers and other interested

parties need to know how the rate of participation has changed over time in order to address two

important questions: Has the program reached more or less of its target population in recent years

relative to earlier years.'? And how has participation among the subgroups of the eligible population

varied over time? Examining the trends in participation rates indicates the program's relative success

at reaching the eligible population.

This study uses a consistent data source and methodology to estimate participation rates over the

past 15 years. Specifically, it uses data from the March Current Population Survey (CPS) to estimate

the number of eligibles, and FSP administrative data to estimate the number of participants. With

these data, we have produced participation rates for every other year between 1976 and 1990. The

study also examines the major causes of the changes in the rates over the 15 years. In particular, it
examines the influence of changes in FSP legislation, changes in the economy, and changes in other

assistance programs on the participation rates.

Although there are a number of estimates of participation rates that, when combined, span the

past 15 years, they cannot be used to support a reliable examination of trends, because each study

used different data and methods to measure the rates (see Trippe, 1989). Thus, until now it has been

impossible to assess how much of the change in each estimate is due to any real change in the rates,

and how much is due to differences in the data or methodology.

The analysis in this study focuses on capturing changes in the rates over time, rather than on

estimating any single participation-rate level. Indeed, the participation rates found in this study are

10 to 15 percentage points lower than the rates calculated with the more appropriate Survey of

Income and Program Participation (SIPP) data on the number of eligibles. The SIPP database is

preferred for estimating the number of eligibles, because it contains more of the information required

to support the eligibility estimation process, and thus provides more reliable estimates of participation

rates. However, because the SIPP database begins with 1984, this study uses the CPS data that have

been available since 1976.

The study finds that FSP participation rates increased between 1976 and 1978 due to changes

in the economy, and increased substantially between 1978 and 1980 due to changes made to the FSP

program under the 1977 Food Stamp Act. The 1977 Act, implemented in late 1978 and early 1979,

increased the number of participants by making the program accessible to more eligible low-income

households. Participation rates remained relatively constant from 1980 to 1988, but again increased

between 1988 and 1990. The recent increase in participation rates is due to the surge in FSP

participation which began in early 1989.

The report is organized as follows:

· Chapter II discusses existing research on participation rates.

2
· Chapter III provides an overview of the data and research methods used to

construct the participation rates in this study.

· Chapter IV presents the participation rate estimates for even years between 1976

and 1990, and compares the rates for selected demographic and economic

subgroups of the population to overall rates.

· Chapter V assesses the major reasons for changes in the rates between 1976 and

1990.

· Appendix A provides a more detailed explanation of the technical procedures used

to estimate the eligible population with the CPS data.

· Appendix B contains a table of changes in the FSP eligibility requirements and

deductions associated with legislative changes in the program over the years of the

analysis.

· Appendix C lists the sample sizes underlying the participation rates.
II. A REVIEW OF THE RESEARCH ON PARTICIPATION RATES IN THE

FOOD STAMP PROGRAM AND OTIIER WELFARE PROGRAMS

This Chapter describes the existing research on participation rates in the FSP and other welfare

programs. Section A describes the existing estimates of participation rates in the Food Stamp

Program and discusses why the rates cannot be used to support a reliable examination of trends.

Section B discusses three limited time-series studies of FSP participation rates. Finally, Section C

presents the available rates for two other public assistance programs, Supplemental Security Income

and Aid to Families With Dependent Children.

A. FOOD STAMP PARTICIPATION RATES

Estimates of participation rates found in available studies vary by up to 30 percentage points for

any given year and unit of analysis, depending on the data source and the estimation methodology

used in the study. Below, we highlight any consistent patterns that can be discerned from the studies,

and discuss why the available rates differ so much and why they cannot be used to support a reliable

examination of trends. Table II.1 summarizes the existing studies and their participation-rate

estimates.

Existing studies have used three different units of analysis to measure participation rates:

· The individual participation rate is the ratio of the number of persons in

participating households to the number of persons in eligible households.

· The household participation rate is the ratio of the number of participating

households to the number of eligible households.

· The benefit participation rate is the ratio of the dollar amount of benefits issued to

the dollar amount of benefits that would have been issued had all eligibles

participated in the program.

Each unit of measurement responds to different targeting issues and thus differentially determines

how well the FSP meets the needs of its target population. Thus, it is not surprising that partici-
TABLE II.1

INDIVIDUAL, HOUSEHOLD, AND BENEFIT

RATES OF FOOD STAMP PROGRAM PARTICIPATION

Individual Household Benefit

Data Source/ Rate Rate Rate

Studies(Date) ReferenceYear(s) % % %

A. Estimates Based on Household Survey Data for Participants

West(1984) CES;a1973-74 24

Coe(1979) PSID; b1976 41

Coe(1983) PSID;b 1979 46

Czajka(1981) ISDPC;1979 28-31

BickelandMacDonald(1981) ISDP;c 1979 47

Ross(1988) SIPP;d1984 51 41

Brown(1988) CES;a 1984-85 28

U.S.GAO(1988,1990a) PSID;b 1986 44

Allin,Martini(1991) SIPP;d 1985 44

B. Estimates Based on Administrative Data for Participants

MacDonald(1975) DecenialCensus;1974 38

Beebout(1981) SIE,e CPS;f 1979,1981 61-69

Czajka(1981) ISDP;c 1979 56

Doyle and Beebout (1988) SIPP;d 1984 66 60 80

Ross (1988) SIPP;d 1984 66 58

Doyle (1990) SIPP;d 1985 64 59 75

Trippe and Doyle (1991) SIPP;d 1988 59 56 67

SOURCE: Trippe (1989).

aConsumer Expenditure Survey.

bMiehigan Panel Study of Income Dynamics.

c1979 Income Survey Development Program Research Test Panel.

dSurvey of Income and Program Participation.

eSurvey of Income and Education.

fMarch Current Population Survey.

6
pation rates calculated with each unit differ, as shown in Table II.1. In general, participation rates

for individuals are higher than those among households, and benefit rates are higher than either the

indiv/dual or household rates. Individual rates range from 38 to 69 percent, household rates range

from 24 to 60 percent, and benefit rates range from 67 to 80 percent.

The rates in Table II.1 also vary according to the reference year of the data. Rates tend to be

higher in more recent years than in earlier years.

Even when the unit of analysis and reference year are the same, the rates in Table II.1 vary

substantially according to the data source used to estimate them. For example, participation rates

among households in 1984 range from 28 percent based on Consumer Expenditure Survey data on

the number of eligibles and participants (Brown, 1988) to 60 percent based on the SIPP data on

eligibles and FSP program data on participants (Doyle and Beebout, 1988). Participation rates among

households in 1985 range from 44 percent based on SIPP data on eligibles and participants (Martini,

1992) to 59 percent based on SIPP data on eligibles and FSP program administrative data on

participants (Doyle, 1990).

The major reason that participation rates differ so widely in the existing studies -- even rates that

have been derived with the same unit of analysis and from the same reference year -- is the disparate

data sources and methodologies used to estimate the number of participants and eligibles. Each of

these factors is discussed below.

1. Data on Participants

Most of the difference in the participation rates found in existing studies is due to the data

source used to estimate the number of participants. Estimates derived from household survey data

on the number of participants (the studies in Section A of Table II.l) are much lower than estimates

derived from FSP administrative data on the number of participants (the studies in Section B of Table

II.l). For example, Ross (1988) found that participation rates in 1984 were 15 percentage points
higher with administrative data than with household survey data on the number of participants,

without a change in the estimated number of eligibles.

FSP administrative data provide an actual count of participants, while survey data provide an

estimate of the number of participants based on reports of participation among a sample of the

population estimated to be eligible for the program. Using household survey data tends to

underestimate the number of participantsfi Hence, studies that use household survey data to

estimate the number of participants generally underestimate the participation rate. However,

researchers must use household survey data when conducting behavioral analyses -- for example, in

behavioral studies of the reasons that eligibles do not participate in the program, household survey

data provide the requisite information on the different characteristics of participating and

nonparticipating eligible households. Most of the studies in Section A of Table II.1 are survey-based

behavioral studies of the FSP eligible population in which participation rates were not the major

fOCUS.

2. Data on Eligibility

Participation rates also vary because researchers use different procedures and data sources to

estimate eligibility for food stamps. Because eligibility for the FSP cannot be observed directly,

researchers must use household survey data to estimate the number of eligibles. To date, over a

dozen different data sources have been used, including various years of the Current Population

Survey (CPS), the Consumer Expenditure Survey (CES), the Survey of Income and Education (SIE),

the Panel Study of Income Dynamics (PSID), the Income Survey Development Program Research

Test Panel (ISDP), and the Survey of Income and Program Participation (SIPP). In general,

researchers apply FSP eligibility criteria to the available information for each household on the file

in order to determine the number of eligibles.

lUsing household survey data has an unknown effect on the number of eligibles. Doyle (1990)

discusses the potential bias in estimates of the number of eligibles derived from household survey

data.

8
However, the quality and quantity of the information necessary for determining food stamp

eligibility among these sources varies substantially. Most sources do not contain information on major

components of the eligibility process, necessitating that researchers develop methods for simulating

the missing or incomplete information. The strength of such methods varies markedly, thereby

affecting the accuracy of the eligibility estimates. Moreover, the accuracy of the estimates varies

according to the resources available for the study, and the available body of literature on the best

approach for compensating for omissions in and weaknesses with the data.

The SIPP household survey data contain more of the information necessary for simulating

eligibility than any previous data source. Thus, estimates of the number of eligibles based on the

SIPP data are subject to fewer measurement problems than estimates based on other household

survey data. However, because the SIPP data were first collected in 1983, they were not available

when most of the other studies of participation rates were conducted. Moreover, the SIPP-based

estimates are still subject to some measurement and reporting errors because of remaining limitations

in the data.

In summary, different studies have generated widely disparate participation rates -- even with the

same unit of analysis and reference year -- for two major reasons:

1. The data sources used to measure the number of participants affect the accuracy

of the estimates -- that is, administrative data, offering actual counts of participants,

provide more accurate measures than survey data.

2. The household survey data used to estimate eligibles are subject to limitations and

the methods used to produce estimates despite these limitations incorporate varying

assumptions.

B. THREE EXISTING TIME-SERIES STUDIES

Three existing studies provide a limited time-series of participation rates in the FSP. In one of

those studies, Trippe (1989) developed participation rates for various years between 1978 and 1988.

The number of participants was derived from actual values based on administrative data. The number

9
of eligibles was estimated from routine updates to the MATH® model, the microsimulation model

used by FNS to evaluate the cost and distributional impacts of proposed program changes. However,

because different methodologies were used to produce each estimate, they are limited. Furthermore,

the databases underlying each estimate of the FSP participation rate reflect forecasts of the economic

and demographic characteristics of the population, rather than actual measures of those

characteristics.

According to Trippe, the participation rate increased from 43 to 65 percent between 1978 and

1981, due to legislative changes in the program and a weakening economy. The rates dropped slightly

in 1982 (to 59 percent) for reasons that were unclear. Finally, the rates remained relatively constant

between 1982 and 1988.

In another study, Trippe and Beebout (1988) estimated FSP participation rates among the

poverty population for each year between 1980 and 1987. While the rates are limited to the subset

of eligibles below poverty and are thus not directly comparable to the rates constructed in this study

or to those discussed above, they do provide some important insights. The time series shows that the

FSP participation rates for eligibles in poverty declined between 1980 (82 percent) and 1982 (77

percent), then remained close to the 1982 level through 1986, and again declined slightly in 1987 (74

percent). Trippe and Beebout surmised that the decline in the rates early in the decade may have

been due to the large increase (17.5 percent) in the number of persons in poverty between 1980 and

1982. The "new poor" of that period may have been less likely to participate in the FSP than the

poverty population before 1980, thereby contributing to the decrease in the participation rate.

In the third study, Trippe and Doyle (1992) developed a time series of participation rates from

1985 and 1988 SIPP data. 2 Although they compared only two years, the observed changes in the

overall rates are noteworthy. In particular, Trippe and Doyle demonstrate that a substantial increase

in the number of eligible households with almost no change in the number of participating households

2Although SIPP-based estimates were also available for 1984, the data are not comparable with

the 1985 and 1988 data due to methodological differences.

10
generated a slight decline in participation rates between 1985 and 1988. They found that the increase

in the number of eligible households was due to the more generous eligibility criteria implemented

in 1986 after the passage of the Food Security Act of 1985. Only six percent of the newly eligible

households participated in the FSP in 1988. Trippe and Doyle concluded that the decline in the

participation rate between 1985 and 1988 was due to a lack of response to the program changes

during that relatively short (three year) period.

C. EXAMINING PARTICIPATION RATES IN THE SSI AND AFDC PROGRAMS

FSP participation interacts with participation in other cash assistance programs. Case workers

are encouraged to notify AFDC and SSI applicants about the availability of the Food Stamp Program.

Thus, an increase in participation in those programs might trigger an increase in FSP participation.

Two recent studies provide trends in participation rates in the AFDC and SSI programs.

1. SSI Participation Rates from 1975 to 1987

Sheils et al. (1990) used data from the CPS to develop several estimates of the SSI program

participation rate, as shown in Table II.2. They found that the rate among elderly persons age 65

or older entitled to federal SSI benefits increased between 1975 and 1978 (from about 54 percent

to 61 percent). The rates subsequently varied and then declined to about 56 percent in 1987.

Shells et al. attributed the early upward trend in federal SSI participation rates to an increasing

awareness of the program subsequent to its implementation in 1974. They attributed the later

downward trend in the federal rate to a decline in the number of individuals eligible for the maximum

benefit, which in turn was due in increases in income from other sources, particularly Social Security

and pensions.

2. AFDC Participation Rates from 1973 to 1984

Ruggles and Michel (1987) used CPS data to develop AFDC family participation rates for several

years between 1967 and 1984, as shown in Table II.3. They adjusted their rates for anomalies in both

11
TABLE I1.2

SSI PARTICIPATION RATES ESTIMATED BY SHELLS ET AL. WITH CPS DATA

Rate Among Those Receiving Rate Among Those Receiving Rate Among Those Receiving

Year Federal SSI State SupplementalBenefits Either Formof SSI

1975 53.6

1976 57.9 42.7 51.0

1977 60.8 43.3 53.1

1978 61.1 44.0 53.7

1979 55.0 45.5 51.4

1980 57.9 49.3 54.7

t,o

1981 58.2 42.8 53.8

1982 54.0 44.5 51.0

1983 51.0 40.5 49.0

1984 55.4 49.3 53.6

1985 54.2 45.5 52.5

1986 53.4 47.1 52.2

1987 56.4 48.1 54.5

SOURCE: Sheils et al. (1990).
TABLE I1.3

AFDC PARTICIPATION RATES ESTIMATED BY

RUGGLES AND MICHEL WITH CPS DATA

(with Error Adjustment)

Year ParticipationRate

1967 41

1970 63

1973 85

1976 87

1981 82

1982 76

1983 78

1984 82

SOURCE: Ruggles and Michel (1987).

13
data collection and data coding that plagued estimates of the AFDC participation rate in many earlier

studies. In addition, they adjusted their rates to remove ineligible persons who received AFDC

payments erroneously.

Ruggles and Michel found that AFDC rates increased dramatically from 1967 to 1976, and

generally declined since then, with two slight upturns in 1981 and 1984. Ruggles and Michel offered

several hypotheses to explain the decline in the rates since the mid-1970s. First, they noted that

eligibility among families in multi-generation households increased without a corresponding increase

in their participation. Such families are likely to have access to the assets and resources of the other

household members and thus have less need for AFDC benefits. Second, they noted that changes

in the economy (weakening in the late 1970s and strengthening in the mid-1980s) interacted with the

restrictive eligibility criteria in the early 1980s. They surmised that the number of eligibles increased

due to the recession, but not as much as would have been the case in the absence of the legislative

changes to the program. They also surmised that the more restrictive eligibility criteria, along with

the increased complexity of program administration and the resultant delays in processing applications_

combined to delay the impact of the recession on participation while also reducing the AFDC

participation rate.

14
III. METHODOLOGY

This chapter presents our methodology for estimating the series of FSP participation rates. We

estimated rates for a selected month in the even years between 1976 and 1990 for ali three units of

analysis--individual, household, and benefits. The selected month of the analysis was determined by

the availability of the FSP caseload data. We also estimated rates by demographic and economic

characteristics of eligible individuals, such as age, household composition, and poverty level.

Below, we describe the data and approach that we used to estimate the number of FSP

participants--the numerator of the participation rate ratio. We then describe the data and approach

that we used to estimate the number of FSP eligibles--the denominator of the participation rate ratio.

We also discuss the FSP eligibility criteria that FSP administrators use to make eligibility and benefit

determinations and how we modeled those criteria to estimate eligibility with CPS data. Finally, we

discuss how we compensated for the information not collected in the CPS but used by program

administrators in determining FSP eligibility.

A. MEASURING FOOD STAMP PROGRAM PARTICIPANTS

We used FSP administrative data from two sources to estimate the number of participants in our

participation rates. The first source is the Food Stamp Program Statistical Summary of Operations

(hereafter referred to as Program Operations data). These data provide the count of persons and

households that were issued benefits and the total dollar value of the benefits issued for each year

and month of the analysis. The second source is the sample of food stamp case records that USDA

uses in its annual reports on the Characteristics of Food Stamp Households (U.S. Department of

Agriculture, 1990, and references noted therein). Prior to 1980, USDA field staff obtained the

samples of case records from a nationally representative sample of households certified to receive

food stamps. Since 1980, USDA has derived the samples from the Integrated Quality Control System

(IQCS)--a system of ongoing case records reviews designed to measure payment error rates. We used

15
the sample of case records in each year to calculate the distribution of persons, households, and

benefits across various demographic and economic characteristics. Appendix C lists the sample sizes

for the case records surveys for each year of the analysis.

As discussed above, one of the major reasons for the disparity among existing participation-rate

estimates is that many estimates use household survey data to estimate the number of participants.

Household survey data substantially underreport the extent of participation. Given this substantial

underreporting, we used FSP administrative data to estimate the number of participants in this

analysis.

B. MEASURING FOOD STAMP PROGRAM ELIGIBLES

We used the March CPS to estimate the number of eligible persons, households, and benefits

for each year of the analysis. In essence, we modeled FSP eligibility criteria to determine which

households on the CPS were eligible for the program, the number of eligible persons in those

households, and the potential benefits to which each eligible household was entitled. The model

relied on a simulation procedure in which we quantified the program rules and applied them to each

dwelling unit in the CPS in each year. Appendix A provides a detailed discussion of our model of

program eligibility.

The eligibility criteria vary from year to year, as discussed below. However, in general, the

criteria apply to (1) income limits and to (2) asset limits that vary according to the size of the food

stamp unit and the characteristics of the unit (such as the presence of an elderly member). The basic

structure of the Food Stamp Program has remained intact since the implementation of the Food

Stamp Act of 1977 (PL 95-113). The major structural change instituted under the 1977 Act was the

elimination of the food stamp coupon purchase requirement. Prior to the 1977 Act, households

deemed eligible for food stamps were required to purchase coupons whose face value varied

according to household size and net income. After the 1977 Act was implemented, the face value

of the coupons issued to households became the difference between the maximum food stamp benefit

16
and 30 percent of net income. Below, we summarize the eligibility criteria before and after the 1977

Act. Appendix B contains a summary of the eligibility criteria for each year of the analysis.

1. Eligibility Criteria Prior to the Food Stamp Act of 1977

Prior to the implementation of the 1977 Act, the Food Stamp Program imposed a net income

test and an asset test in determining need. Households that consisted entirely of AFDC or SSI

recipients were determined to be eligible regardless of their income and assets. For all other

households, net income was to be below maximum monthly limits established by USDA, which varied

according to household size and by state of residence (Alaska, Hawaii, and ali other states). In

September 1976, the allowable limit on net income for a household of 4 in the continental United

States was $553; in February 1978, it was $580. Countable assets were limited to $1,500 for

households without elderly members and for elderly single households, and limited to $3,000 for

households of 2 or more with at least one elderly member.

Net income was defined as gross income less deductions for work-related expenses, dependent

care, medical expenses, shelter expenses, payroll taxes, education tuition and fees, casualty or loss,

alimony, and expenses incurred to house boarders and live-in attendants. Countable assets included

bank accounts, stocks and bonds, second homes, and recreational vehicles, but excluded the principal

residence, one automobile used for household transportation, vehicles necessary for producing

income, personal effects and household goods, income-producing property, tools for a trade, life

insurance policies, and inaccessible resources.

Households deemed eligible for food stamps were required to purchase coupons whose face

value varied according to household size and by geographic location. The cost of these coupons

varied according to household size and net income and by geographic location. In 1976, a household

of size 4 in the continental United States whose net income equalled $100 paid $25 for coupons

valued at $166. In 1978, the same household paid $25 for coupons valued at $174.

17
2. Eligibility Criteria After the Food Stamp Act of 1977

The 1977 Act eliminated the requirement that food coupons be purchased, changed the

definition of net income, changed the determination of net income limits, and deleted automatic

eligibility for AFDC and SSI households. It also assigned minimum benefits to single-person

households and households of 2 persons. Subsequent legislation introduced a gross income test for

nonelderly, nondisabled households, reintroduced automatic eligibility for certain recipients of cash

assistance, 1 and raised the asset limit to $2,000 for households without elderly members in 1986.

Gross income was defined as all cash income of members of the food stamp unit less certain

disregards, such as the earnings of students under age 18. (The nature of the disregards changed

somewhat between 1980 and 1990.) Among households that did not contain an elderly or disabled

person, gross income was limited to 130 percent of the monthly federal poverty guidelines each year

beginning in 1982. 2 The monthly poverty guidelines for a household of 4 in the continental United

States ranged from $621 in August 1980 to $1,009 in August 1990.

Net income was constrained to be less than the monthly federal poverty guidelines each year

between 1980 and 1990. In 1980, net income was equal to gross income less the following

deductions:

· A standard deduction, whose amount varied across the continental United States,

Alaska, and Hawaii

· A deduction for work-related expenses equal to 20 percent of earnings

· A deduction for expenses incurred for the care of dependent children or

incapacitated adults, up to a limit

1The Food Security Act of 1985 again granted automatic eligibility for food stamps to households

that consisted entirely of AFDC or SSI recipients.

2The official monthly poverty guidelines are published by the U.S. Department of Health and

Human Services (DHHS) and are adjusted each year to account for inflation. The FSP income

guidelines based on the poverty guidelines vary according to household size, are the same for the

contiguous states and the District of Columbia, and vary slightly for Alaska and Hawaii and U.S.

territories.

18
· A deduction for shelter costs in excess of 50 percent of gross income less the

previous deductions, up to a maximum placed on the combined value of the shelter

and dependent care deductions

In subsequent years, the criteria for determining net income changed somewhat. The standard

deduction increased with inflation. The earnings deduction was lowered to 18 percent in 1982 and

then in 1986, raised again to 20 percent. A medical deduction was introduced with the 1980

legislation (PL 96-249) to account for the out-of-pocket medical expenses incurred by elderly or

disabled persons in the household. The deduction was equal to the total expenses of all elderly or

disabled persons in the household in excess of $35. The shelter deduction cap was also eliminated

for elderly and disabled households in the 1980 legislation. With the implementation of the Food

Security Act of 1985, the shelter deduction limit was separated from the child care limit in 1986 and

indexed.

The elimination of the purchase requirement in the 1977 Act changed how benefits to eligible

households were determined. The face value of the coupons issued to households became the

difference between the maximum food stamp benefit and 30 percent of net income, under the

assumption that households should spend no more than 30 percent of their income to purchase food

valued at the maximum allotment. 3 The maximum food stamp benefit was initially set equal to the

Thrifty Food Plan (TFP) value for a family of 4 with a specific composition and then adjusted for the

size of the unit and for economies of scale. It was temporarily reduced to 99 percent of the TFP in

late 1982 and 1983, and was again raised to 100 percent of the TFP in 1984. Under the Hunger

Prevention Act of 1988, the maximum benefit was incrementally raised above the TFP, reaching 103

percent of the TFP by FY 1991. For a family of 4 in the continental United States, the maximum

food stamp benefit ranged from $209 in August 1980 to $331 in August 1990.

3There were and are some exceptions to this formula for households that are entitled to $10 or

less of food stamp coupons.

19
3. Methods for Estimating the Missing or Incomplete Information in the CPS

The March CPS is missing several types of information necessary for determining FSP eligibility.

In particular, the CPS (1) docs not contain information on thc food stamp unit, (2) provides only

annual income amounts rather than monthly income amounts, (3) lacks asset information, and (4)

lacks deductible expanses that are necessary for estimating net income amounts. Below, we

summarize how we compensated for the missing information. Appendix A contains more detailed

information on how we resolved these deficiencies with the data.

a. Measuring the Food Stamp Unit

The formation of the food stamp unit is a function of the shared purchase and preparation of

food in addition to shared living quarters, with some exceptions which varied over our study period.

The CPS identifies only persons who share living quarters. Thus, we could not model the food stamp

unit because the CPS lacks information on who shares food purchases and preparation. However,

we excluded from the unit SSI recipients who receive cash in lieu of food stamp coupons in SSI

cashout states. Hence, the food stamp unit in this analysis is: persons who share living quarters

excluding those SSI recipients residing in SSI cashout states who receive cash for their food stamp

benefits.

b. Allocating Annual Income to Monthly Amounts

We allocated the person-level annual income on the CPS to monthly amounts by using formulas

specific to each income source. The formulas were designed to replicate patterns observed in the

SIPP. We allocated earnings based on reported weeks of work with the specific periods assigned

randomly within the year (subject to the constraint that the periods of work among husbands and

wives coincided by at least one month). With some exceptions, we allocated unemployment

compensation evenly over reported weeks of nonwork, and allocated asset income and cash welfare

20
benefits evenly over the year. Finally, we allocated other unearned income w/thin the year according

to the person's age and type of income.

We used the estimated monthly person income and the unit designation just described to

approximate the gross income of the food stamp unit for the selected month in each year of the

analysis. For years in which a gross income test was imposed, we computed gross income as the sum

of the total income of all members of the food stamp unit assigned to the selected month.

c. Estimating Asset Balances

We developed a proxy for countable assets based on reported annual income from financial

assets. Countable assets were assumed to equal the income from financial assets divided by a rate

of return of 6.5 percent. Appendix A discusses the limitations of using this proxy for countable

assets.

d. Estimating Net Income

We used a regression model to estimate net income as a function of the unit's earnings,

unearned income, gross income, and geographic location for each year. We used the sample of food

stamp case records to estimate the regression equation. We estimated the relationship between the

characteristics of each food stamp unit and its food stamp net income, and applied the resulting

coefficients to the CPS data. Appendix A contains a detailed discussion of the procedure used to

estimate food stamp net income.

Using the enhanced CPS data for each year, we determined eligibility for each household in the

CPS according to program regulations in effect in the corresponding year and month. Appendix C

lists the unweighted counts of households simulated to be eligible for the FSP, along with the original

sample sizes for each of the CPS files used in this analysis.

21
IV. FSP PARTICIPATION RATES: 1976 TO 1990

This chapter presents our estimates of FSP participation rates from 1976 to 1990fi We first

discuss the trends in the participation rates among the total eligible population, and then compare

the rates for selected demographic and economic subgroups of the population with the overall rates.

The purpose of this time-series study is to provide a consistent, accurate measure of the trends

in participation rates, rather than to provide the most accurate estimate of any single rate. Indeed,

due to limitations with the CPS, the participation rates reported in this report are consistently lower

than estimates derived from the SIPP database (as discussed in Appendix A). However, we used the

CPS database in this analysis because, unlike the SIPP database, it is available for the entire period

from 1976 to 1990. The more precise SIPP-based estimates of eligibles have been used to estimate

participation rates in August 1984, August 1985, and January 1988 (see Doyle and Beebout, 1988;

Doyle, 1990; and Trippe and Doyle, 1992). They produce participation rates that are 10 to 15

percentage points higher than those based on the CPS data used in this report. For example, the

preferred SIPP-based estimate of the individual participation rate in August 1988 is 59 percent, rather

than the 49 percent CPS-based estimate reported in this report (see Table IV.l).

A. TRENDS IN AGGREGATE FSP PARTICIPATION RATES

Participation rates in the FSP increased between 1976 and 1978, and then increased substantially

between 1978 and 1980, as shown in Table IV. 1 and illustrated in Figure IV. 1. Participation rates

remained relatively constant between 1980 and 1988, but again increased between 1988 and 1990.

Participation rates for individuals increased by 7 percentage points between 1976 and 1978, increased

by over 16 percentage points between 1978 and 1980, and changed by no more than 8 percentage

points over the entire period from between 1980 to 1988. However, participation rates again rose

_This analysis estimates participation rates for even years only. Thus, the 15-year period between

1976 and 1990 includes rates for 1976, 1978, 1980, 1982, 1984, 1986, 1988, and 1990.

23
'FABLE IV. 1

MONTtlLY NUMBER OF ELIGIBLES AND PARTICIPANTS AND PARTICIPATION RATES

FOR INDIVIDUALS, tlOUSEItOLDS, AND BENEFYIXS:

1976-1990

Participation Rates

Sept. 1976 Feb. 1978 Aug. 1980 Aug. 1982 Aug. 1984 Aug. 1986 Aug. 1988 Aug. 1990

Eligibles (CPS) -- Thousands --

Individuals 49,200 38,948 35,819 38,481 37,751 39,044 37,206 36,811

Households 15,888 13,706 13,839 14,328 13,987 15,032 14,640 14,309

Benefits $1,027,127 898,328 1,078,732 1,312,883 1,349,598 1,499,189 1,597,915 1,855,529

Participants (Program Operations)

Individuals 15,880 15,387 20,185 20,548 19,990 19,069 18,358 20,396

House holds a 5,308 5,286 7,372 7,487 7,324 7,102 7,016 7,973

Benefits $375,461 398,066 689,381 785,658 841,442 860,472 907,117 1,188,808

Participation Rates (CPS and Program -- Percent --

Operations)

Individuals 32.3 39.5 56.4 53.4 53.0 48.8 49.3 55.4

Households 33.4 38.6 53.3 52.3 52.4 47.3 47.9 55.7

Benefits u 36.6 44.3 63.9 59.8 62.4 57.4 56.8 64.1

Participation Rates (SIPP and -- Percent --

Program Operations)

Individuals NA NA NA NA 65.9 NA 59.0 NA

Households NA NA NA NA 60.0 NA 56.0 NA

Benefits NA NA NA NA 79.5 NA 66.7 NA

SOURCE: Counts for participants are from the Food Stamp Program Statistical Summary of Operations (Program Operations). The CPS-based estimates of eligibles

were derived from simulations based on the CPS analysis file developed by MPR from the March 1977, 1979, 1981, 1983, 1985, 1987, 1989, and 1991 CPS

files. The unweighted sample sizes are listed in Appendix C. The SIPP-based estimates of participation rates are from Doyle and Beebout (1988), and from

Trippe and Doyle (1992).

aThe numbers of participating households for September 1976 and February 1978 are not available from the Program Operations data. We estimated these numbers by

applying the ratio of administrative caseload data to Program Operations data for benefits, and to administrative caseload data for households.

bi'he benefit rate for 1976 and 1978 (pre-EPR periods) is based on the net benefit (maximum benefits-purchase requirement). Hence, the benefit rates are consistent

over the 1976 to 1988 period.
FIGURE IV.1

FSP MONTHLY PARTICIPATION RATES: 1976-90

?0_

./

80_, - Benefits

Individuals

507.

Households

40_

30_. I [ I I !

Sept_ 1978 Feb. 1978 Aug. 1980 Aug. 1982 .tug. 1984 Aug. 1986 Aug. 1988 Aug. 1990

Month/Year

25
sharply between 1988 and 1990, increasing by 6 percentage points over two years. Hence, the FSP

has reached a much greater proportion of its target population in the years since 1980 than before

1980, and is reaching an even greater proportion of eligible persons in 1990 than it did in the 1980s.

Figure IV. 1 shows that the trend in rates was consistent among the three units of measurement:

the benefit rate was consistently higher than the individual rate and the household rate, and the

individual rate was consistently higher than the household rate. This consistent pattern indicates that

households with higher benefit levels, and thus greater need, are more likely to participate than

households with lower benefit levels. It also implies that larger households are more likely to

participate than smaller households. This pattern has also been found in other research: Trippe and

Doyle, 1992; Doyle, 1990; Allin and Beebout, 1989; Trippe, 1989; and Ross, 1988.

B. TRENDS IN PARTICIPATION RATES BY SELECTED DEMOGRAPHIC AND ECONOMIC

CHARACTERISTICS

In this section, we discuss how the participation rates for subgroups of the eligible population

compare with rates for the total eligible population. In most cases, trends for the subgroups follow

the same patterns as trends for the total population. That is, when aggregate rates go up, rates for

selected groups of persons, such as elderly, children, or single families, go up; when aggregate rates

go down, rates for selected groups of persons go down. However, the rates for the subgroups of

persons are consistently higher or lower than the overall rates for persons. These comparisons are

discussed in this section.

1. Trends by Demographic Characteristics

a. Household Size

Participation rates for each household size follow the same general trends as the rates for all

households, as shown in Table IV.2 and Figure IV.2. However, smaller households tend to

participate at lower rates than average, and larger households tend to participate at higher rates than

average. In their multivariate analysis, Martini (1992) found similar results for August 1985

26
TABLE IV.2

HOUSEHOLD PARTICIPATION RATES BY HOUSEHOLD SIZE:

1976-1990

Month/Year

Sept. Feb. Aug. Aug. Aug. Aug. Aug. Aug.

1976 1978 1980 1982 1984 1986 1988 1990

Household Size

(Number of Persons) Household ParticipationRates (Percent)

1 31.7 33.2 44.5 47.6 50.6 41.1 41.5 47.6

2 36.3 38.9 49.8 46.3 46.4 45.1 47.6 60.6

3 40.8 45.5 65.3 64.7 59.0 56.5 63.2 72.9

4 31.7 37.5 59.8 57.5 53.4 55.5 50.7 57.4

5 28.3 41.2 63.3 65.4 57.7 50.9 46.9 60.4

6+ 30.8 43.9 63.6 46.3 56.4 47.5 46.7 38.7

Total 33.4 38.6 53.3 52.3 52.4 47.3 47.9 55.7

Average Household Size

Eligibles 3.1 2.8 2.6 2.7 2.7 2.6 2.5 2.6

Participants 3.0 2.9 2.7 2.7 2.7 2.7 2.6 2.6

SOURCE: Counts for participants are from the Food Stamp Program Statistical Summaryof Operations. F_timates for

eligibles were derived from tabulations based on the CPS analysis file developed by MPR from the March 1977,

1979, 1981, 1983, 1985, 1987, 1989, and 1991 CPS files. The unweighted sample sizes are listed in Appendix C.

27
FIGURE IV.2

PARTICIPATION RATES BY HOUSEHOLD SIZE

65_.

. t

i ·

i ·

i

: , . . , 5+ persons

, · o ·

· Total /

w ·

/

457.

1-2 Persons

357,

//

35_. I I I I I I

Sept. 1976 Feb. 1978 Aug. 1980 Aug. 1982 Aug. 1984 Aug. 1986 Aug. 1988 Aug, 1990

Month/Year

28
based on SIPP data. Martini concluded that smaller households tend to participate at lower-thanaverage rates for two reasons: (1) they might have more resources available to them than is revealed

by their income and assets, and (2) they typically include elderly persons, and elderly persons tend

to participate at lower rates than nonelderly persons.

Although this pattern of higher participation rates as household size increases is true for most

years in the time series, the pattern does not hold in 1988 and 1990. In these years, participation

rates among persons in the largest households and persons in the smallest households were lower

than average. This pattern is seen in other research, in which participation rates peak for households

that contain three persons (see Doyle, 1990; Trippe and Doyle, 1992; and Martini, 1992). Although

rates decline with household sizes of more than three persons, rates for larger households are still

higher than the rates for single-person households.

b. Age of Persons in the Household

The trend in participation rates for elderly persons, children, and adults also closely follows the

trend in rates for all persons, as shown in Table IV.3 and Figure IV.3. However, the rates for elderly

persons are much lower than average (by 10 to almost 30 percentage points), the rates for children

are much higher than average (by 5 to 20 percentage points), and the rates for adults are slightly

lower than average (by 1 to 5 percentage points) in every year of the analysis.

Participation rates for elderly living alone are consistently higher than for elderly living with others

(by 6 to 14 percentage points), but are much lower than overall rates. These results are consistent

with the findings of other studies (see Trippe and Doyle, 1992; and Martini, 1992).

Participation rates for elderly persons are consistently lower than the overall rates because

elderly persons tend to live in smaller households, have higher per-capita incomes, and receive smaller

monthly benefits than others--all of which are characteristics associated with low participation rates.

Martini (1992) analyzed whether being elderly or living alone had a greater effect on reducing the

probability of FSP participation. They found that, overall, living alone had a larger

29
TABLE IV.3

INDMDUAL PARTICIPATION RATES BY SELECTED DEMOGRAPHIC

CHARACTERISTICS: 1976-1990

Individual Participation Rates (Percent)

Sept. Feb. Aug. Aug. Aug. Aug. Aug. Aug.

1976 1978 1980 1982 1984 1986 1988 1990

Elderly

Total 22.5 23.3 31.8 28.0 29.2 25.4 24.1 27.3

LMng Alone 26.0 28.1 36.7 35.0 36.4 28.0 29.2 31.4

LivingwithOthers 19.6 19.3 26.6 21.6 21.6 22.2 17.9 22.0

Children under Age 18 39.3 49.3 72.8 67.7 66.0 61.7 62.1 67.9

Preschool(underage5) 38.5 45.4 76.4 68.2 66.9 65.7 63.4 68.7

School-age (age 5-17) 39.6 50.8 71.2 67.4 65.7 59.9 61.5 67.5

Adults Ages 18 to 59 27.7 35.0 50.8 50.0 49.1 45.7 47.1 53.6

Household Composition a

Single Adults with Children: 54.6 56.4 74.8 64.5 63.9 58.0 64.6 72.9

Singlefemaleadultswith children NA 58.1 NA 66.8 67.3 61.4 69.0 76.8

Single male adults with children NA 27.4 NA 35.0 24.0 22.0 21.4 34.1

Two or More Adults with Children 24.9 35.7 54.3 52.6 55.8 53.0 47.7 49.2

HouseholdswithoutChildren 22.7 24.3 36.9 40.7 33.3 30.2 30.7 36.9

Race/Ethnicity of Head a

WhiteNon-Hispanic NA 32.6 NA 36.6 44.0 41.8 43.5 48.5

Black Non-Hispanic NA 53.2 NA 86.1 72.8 66.3 63.4 72.7

Hispanic NA 43.7 NA 50.2 50.0 39.2 43.9 49.9

Other NA 38.0 NA 73.9 48.5 63.6 43.1 42.1

Gender

Male NA 36.9 NA 50.4 50.7 46.8 46.2 52.0

Female NA 41.5 NA 55.7 53.6 50.4 51.7 57.9

Total 32.3 39.5 56.4 53.4 53.0 48.8 49.3 55.4

SOURCE: Counts for participants are from the Food Stamp Program Statistical Summary of Operations. Estimates for eligibles

were derived from tabulations based on the CPS analysis file developed by MPR from the March 1977, 1979, 1981,

1983, 1985, 1987, 1989, and 1991 CPS files. The unweighted sample sizes are listed in Appendix C.

aFSP participant data are not available (or contain too many missing values) for 1976 and 1980 for those entries marked as NA.

30
FIGURE IV.3

PARTICIPATION RATES

BY AGE

80_.

/ ·

/ ·

/

? ,.

7OF. / ,' ' ' ' -.

',' Preschool Children -'

,_ '. o...°_

· o..-

60_. / " .... School-Age

,' Children

?/'*

407. /"__ Idults

,/ ,.......

30% ,' "'-

E]derly

[ -

o

........... .o t

20_. I I I I I I

SepL 1976 Feb. 1978 Aug. 1960 Aug. 1982 Aug. 1984 Aug. 1986 Aug. 1988 Aug, 1990

Month/Year

31
effect than being elderly, although being elderly also had a substantial effect. Ponza and Wray (1990)

found that elderly persons often do not participate for three reasons: (1) because they believe that

they do not need the assistance, (2) they would rather rely on other sources, or (3) they believe that

they are ineligible.

The participation rate for elderly persons was closer to the average rate before 1980 than after

1980. Before 1980, the rate among elderly persons was only 10 to 15 percentage points lower than

average. From 1980 to 1990, the rate was 20 to 30 percentage points lower. The rate among elderly

was lower as a proportion of the rate among total eligibles from 1980 on, due to provisions in the

1977 Act that increased the number of elderly eligibles. This issue is discussed in the next chapter.

Participation rates among children are consistently higher than average because, according to

Martini (1992), a high correlation exists between households that receive AFDC or General

Assistance and the presence of children in those households. Hence, it is the receipt of these other

forms of public assistance that has the greatest effect on FSP participation rates among children.

c. Household Composition

Figure IV.4 shows that the trend in participation rates for subgroups based on household

composition moves with the trend for all persons. Participation rates for single adults with children

almost exactly mirror the rates among all persons, but the rates are 10 to 20 percentage points higher

than average. Participation rates for households without children follow the same general pattern

as the total rates, but are 10 to 20 percentage points lower than average. Among the persons in

households that consist of single adults with children, the rates for households with single female

adults are much higher than for households with single male adults. One reason that these rates are

higher is that the single female adult households are more closely correlated with AFDC households,

which have higher-than-average participation rates.

32
FIGURE IV.4

PARTICIPATION RATES

BY HOUSEHOLD COMPOSITION

60_.

70% _ Single Adults

/

30_'. ,' " .................

_f

" Households Without Children ,J

w'

...ooa

.....°°'''

20_. I I I I I I

Sept. 1976 Feb. 1978 Aug. 1980 Aug. 1982 Aug. 1984 Aug. 1986 Aug. 1988 .,tug, 1990

Month/Year

33
d. Race and Ethnic Origin

Participation rates by race and ethnic origin are not available for 1976 and 1980 because caseload

numbers are not available for those years. However, among the rates shown, black non-Hispanics

had the highest participation rates in all years of the participation rate series. Hispanics had the

second highest rates for most years, and white non-Hispanics had the lowest rates. Rates for the

group "Other" should be viewed cautiously because the definitions may not be consistent in all years.

In 1986 and 1988, rates for Hispanics were much lower than in previous years, and fell below

the rates for white non-Hispanics in 1986. The lower rates for Hispanics may reflect increases in

eligibility among newly legalized aliens, with slight increases in participation (see U.S. Department

of Agriculture, 1990, for a discussion of changes in immigration laws). 2

Although the participation rates among the racial/ethnic groups differ, Martini (1992) found that

differences among the participation rates diminish when other household characteristics are held

constant.

e. Gender

Participation rates for females are consistently 3 to 5 percentage points higher than the rates for

males in all years for which data are available (caseload data on gender are not available for 1976 and

1978). This finding is consistent with other studies (see Allin and Beebout, 1989; and Trippe and

Doyle, 1992).

2. Trends by Economic Characteristics

Participation rates for various economic groups follow the same general trend as the total

population, as shown in Table IV.4 and illustrated in Figure IV.5. However, as with the demographic

groups, participation rates for different economic groups tend to be consistently higher or lower than

average rates.

2The Immigration Reform and Control Act (IRCA, PL99-603) of 1986 liberalized the legalization

of aliens.

34
TABLE IV.4

INDIVIDUAL PARTICIPATION RATES BY SELECTED ECONOMIC CHARACTERISTICS:

1976-1990

Individual Participation Rates (Percent)

1976 1978 1980 1982 1984 1986 1988 1990

Household Income as a Percent of

Poverty

Total < 100% 46.1 55.2 72.6 66.1 65.4 60.2 62.0 68.3

Total> 100 8.9 10.3 20.7 13.8 13.7 12.4 13.6 17.7

Household Income from a

Earnings 15.6 18.5 30.1 29.9 30.4 28.7 28.8 29.7

Unemployment compensation NA 29.8 NA 23.9 24.4 24.2 19.6 25.7

Monthly Household Benefits

as a Percent of Maximum Benefit

1- 25% 11.4 18.2 27.8 27.5 20.8 22.5 22.9 24.9

26 - 50% 37.4 45.6 62.4 50.5 53.5 46.1 47.3 46.5

51- 75% 52.2 62.6 85.7 78.6 69.5 64.8 65.7 65.9

76- 99% 48.5 56.3 55.3 77.0 95.1 77.1 75.3 90.5

100% 12.6 21.9 38.9 35.7 39.5 41.2 38.0 47.5

Total 32.3 39.5 56.4 53.4 53.0 48.8 49.3 55.4

SOURCE: Counts for participants are from the Food Stamp Program Statistical Summary of Opera- tions.

Estimates for eligibles were derived from tabulations based on the CPS analysis file developed by

MPR from the March 1977, 1979, 1981, 1983, 1985, 1987, 1989, and 1991 CPS files. The

unweighted sample size are listed in Appendix C.

aFSP participant data are not available (or contain too many missing values) for 1976 and 1980 for

those entries marked as NA.

35
FIGURE IV.5

PARTICIPATION RATES

BY SELECTED ECONOMIC CHARACTERISTICS

80Y.

Persona ID Bousebolds in Poverty

60%

407.

Persons in Households vltb Earnings

20_. " " Persons in Households Not fuu Poverty

°°o°-"

°°°

,°°.° *

0_. ' I I I I I I

Sept. 1976 Feb. 1978 Aug. 1980 Aug. 1982 Aug. 1984 Aug. 1986 Aug. 1988 Aug. 1990

Month/Year

35
a. Poverty Level

As expected, participation rates in all years were much higher for persons in households whose

gross income was below the poverty level than for persons in households whose gross income was

above the poverty level, as illustrated in Figure IV.5. 3 Participation rates for persons living in

households in poverty were 11 to 16 percentage points higher than average, while rates for persons

living in households not in poverty were 23 to 40 percentage points lower than average. The overall

trend in participation rates among persons in households in poverty is consistent with the trend

among the poverty population found in Trippe and Beebout (1988).

b. Income Sources 4

The pattern of participation rates among persons in households with earnings are similar to the

pattern of rates among all persons, but are much lower and vary less, as shown in Figure IV.5. After

a substantial increase between 1978 and 1980 (an increase of 12 percentage points), the participation

rate for persons in households with earnings remained almost constant through 1990.

The participation rates for persons in households that received unemployment compensation

were also lower than average in all years for which data were available. However, because the sample

size for persons in households with unemployment compensation was small, these estimates should

be interpreted with caution.

c. Benefit Levels

Figure IV.6 shows the trend in participation rates by FSP benefit levels as a percent of the

maximum benefit. Persons eligible for the lowest benefit levels (between 1 and 25 percent of the

maximum benefit) participate at lower rates than persons eligible for higher benefit levels. In

3Other studies support this finding. See, for example, Allin and Beebout (1989), Doyle (1990),

and Trippe and Doyle, 1992.

4In this analysis, we did not estimate participation rates among persons reporting AFDC, SSI, or

General Assistance because of the substantial underreporting of assistance from these programs in

the CPS.

37
FIGURE IV.6

PARTICIPATION RATES BY FSP BENEFIT

LEVELS AS A PERCENT OF MAXIMUM BENEFIT

./

907, ' _ - ,es

· · "%

t o · ·

70_, ,' -..

/

50_. "' __"_ i_

........................ :...i..j/"'

/

30_ /

· II - IIIL

/ .......

t s

· /

lo_. I , I I I I I

Sept. 1976 Feb. 1978 Aug. 1980 Aug. 1982 Aug. 1984 Aug. 1986 Aug. 1988 Aug. 1990

Month/Year

38
general, participation rates are higher among persons with relatively large potential benefits than

among persons with relatively small potential benefits. However, persons in households eligible for

100 percent of the maximum benefit participate at rates below average. This pattern is found in

other studies and is likely due to measurement problems among the lowest income group (see Trippe

and Doyle, 1992).

The other exception from the overall trend by benefit level is among persons in households with

benefits between 75 and 99 percent of the maximum benefit. These households participate at rates

that are lower than rates among persons eligible for benefits between 51 and 75 percent of the

maximum benefit in 1976, 1978, 1980, and 1982. In addition, participation rates among persons in

the 76 to 99 percent of the maximum benefit range do not follow the same pattern as other groups.

For example, while average participation rates increased between 1978 and 1980, rates among this

group declined. Then, while average rates declined between 1980 and 1984, rates among this group

increased. Martini (1992) found similarly unusual patterns of participation rates in intermediate

intervals of the benefit distribution for observed participation rates. Martini suggests that a possible

explanation for the unusual patterns in the observed rates is that certain benefit levels imply different

household sizes. The patterns do not show up in predicted participation rates because the latter are

computed for the average household size.

Martini also examined the overall relationship between benefit levels and participation rates.

He found that the relationship between the FSP benefit amount and participation in the program is

positive overall. However, when income, household size, and other demographic and economic

characteristics are held constant, the net effect of the benefit amount on participation is rather small.

39
V. CAUSES OF THE TRENDS IN FSP PARTICIPATION RATES

This chapter examines the reasons behind the observed trends in FSP participation rates between

1976 and 1990. As discussed in Chapter IV, participation rates increased between 1976 and 1978,

increased substantially between 1978 and 1980, and then remained relatively constant from 1980 to

1988. Rates again increased between 1988 and 1990. The substantial rise in participation rates from

1978 to 1980 was due to major changes made to the FSP under the Food Stamp Act of 1977.

Participation rates change when the rate of growth in the number of participants differs from

the rate of growth in the number of eligibles. Changes in FSP legislation, economic conditions, and

other programs affect the rate of growth among participants and eligibles, and thus cause

participation rates to change. Since these influences often occur simultaneously, it is difficult to sort

out their separate effects on participation rates. However, in most cases, one of the influences

dominates the others, causing participation rates to change in a particular direction. Below, we

describe how each of the influences affected the number of participants and eligibles, causing the

observed trends in participation rates between 1976 and 1990. Table V. 1 summarizes the dominant

influence on each change in the participation rate.

A. CHANGES IN FSP LEGISLATION

A major influence on participation rates has been changes in FSP legislation. Congress passes

legislation in an attempt to balance competing program objectives against political and economic

forces. For example, Congress has sought to find the appropriate balance between ensuring that the

most needy households receive assistance and controlling budgetary expenditures. Legislative changes

may be restrictive or expansionary, and may affect the number of eligibles, participants, or both. The

legislative changes that had the greatest effect on participation rates are described in this section.

41
TABLE V. 1

SUMMARY OF MAJOR INFLUENCES ON FSP

PARTICIPATION RATES:

1976 to 1990

Periodof Participation EffectonNumberof Directionof ChangeIn

Rate Change Major Influence Participantsand Eligiblesa ParticipationRates

1976to 1978 Economy (Rising inflation Almost no change in partici- Up (Dy7 percentage

and strengthening pants. Substantial decrease in points)

economy) eligiblesdue to the improving

economy and rising inflation.

Rising inflation resulted in

more restrictive asset and income guidelines in real terms.

1978 to 1980 Legislation (Food Stamp Substantial increase in particiAct of 1977) pants as a result of eliminating Up (Dyover 16

purchase requirement, percentage points)

Decrease in eligibles as a result

of capping income eligibility.

1980 to 1982 Economy (Recession) Almost no change in partici- Dov;m(Dyabout 3

pants. Substantial increase in percentage points)

eligibles clue to more households meeting the income eligibility guidelines.

1982to1984 NA NA Nochange

1984to 1986 Legislation(1985Food Almost no change in partici- Down (Dyabout 4

Security Act) pants. Substantial increase in percentage points)

eligibles due to the more

generous eligibility criteria.

1986to1988 NA NA Nochange

1988to 1990 Medicaid expansion, Substantial increase in partici- Up (by about 6

Legislation (Homeless pants due to the expansion in percentage points)

Assistance Act), IRCA the medicaid program, increased outreach and expedited service, and immigration

laws granting resident status to

certain aliens. Almost no

change in eligibles.

aThe effect on the number of participants and eligibles and the direction of the change in participation rates is based on the

rates for individualsin Table IV.1

42
1. Food Stamp Act of 1977

Changes made to the FSP under the Food Stamp Act of 1977 were largely responsible for the

dramatic rise in participation rates between 1978 and 1980. The 1977 legislation, implemented in late

1978 and early 1979, eliminated the food stamp coupon purchase requirement. Eliminating the

purchase requirement meant that households were no longer required to pay a portion of the value

of the coupons from their own resources. Instead, they were awarded coupons equal to the "bonus

value" of the coupons to which they had previously been entitled, without having to pay anything for

the stamps. This change increased the number of participants by making the program more accessible

to many already eligible, low-income households. U.S. Department of Agriculture (1981) estimated

that the elimination of the purchase requirement alone may have added 3.6 to 4.7 million persons to

the program. Table IV. 1 showed an increase of 4.8 million participants between February 1978 and

August 1980.

In addition to eliminating the purchase requirement, the 1977 legislation also introduced a

number of restrictive changes that reduced the number of eligibles. The restrictive provisions also

reduced the number of participants somewhat, but the much larger increase in participation from the

elimination of the purchase requirement swamped any decrease in participation from the restrictive

changes. These provisions, implemented during 1979, included (1) lowering the net income limits to

the poverty line, (2) replacing several previously itemized deductions with a standard deduction, and

(3) limiting the amounts of the remaining deductions. A major effect was to lower the effective

income eligibility cutoff and reduce benefit levels for households that were previously allowed high

deductions at the top end of the eligible income distribution. Another restrictive change was the

elimination of automatic eligibility for households in which all members received AFDC or SSI

income. The U.S. Department of Agriculture (1981) estimated that the restrictive provisions removed

500,000 to 700,000 participants, and made about 3.5 million persons ineligible who would have been

eligible to participate before the Act was passed. Our analysis shows a decrease of 3.1 million

43
eligibles between February 1978 and August 1980. Congress amended the 1977 Food Stamp Act in

1979 and again in 1980 with changes that generally tightened the administration of the program even

more.

The net effect of the increase in participants due to the elimination of the purchase requirement

and the reduction in the number of eligibles due to the restrictive changes was an overall increase

in the participation rate between 1978 and 1980, from 40 percent to 56 percent among individuals.

Although overall participation rates increased by over 16 percentage points between 1978 and

1980, the rates among elderly persons increased only by about 8 percentage points. The smaller

increase in rates among elderly persons was probably due to the larger-than-average increase in the

number of elderly eligibles (the denominator of the participation ratio). The increase in elderly

eligibles was affected by a provision in the 1979 Amendments to the 1977 legislation that allowed

households with elderly persons to deduct the elderly person's excess medical expenses, and which

removed the limit on their deductions for excess shelter costs. Although the elimination of the

purchase requirement substantially increased the number of elderly participants, the additional

increase in elderly eligibles due to the liberalized eligibility requirements dampened the increase in

participation rates among elderly persons.

Conversely, the participation rate among children increased by much more than average between

1978 and 1980--almost 24 percentage points, compared with over 16 percentage points. The reason

for the greater increase in the rate among children is that the restrictive provisions of the 1977 Act

affected households with children more than they did other households. Thus, the decline in the

number of eligible children was greater than average, causing the participation rate among children

to increase more than average.

2. OBRA of 1981

Between 1980 and 1982, Congress enacted three laws that tightened program eligibility rules or

benefit amounts even further than did the 1977 Act. These laws--the Omnibus Budget Reconciliation

44
Act of 1981, the Food Stamp and Commodity Distribution Amendments of 1981 and the Food Stamp

Amendments of 1982--introduced three major restrictions: (1) a limit on gross income at 130 percent

of the poverty level for households that did not contain elderly or disabled members, (2) a reduction

in the earned income deduction from 20 percent to 18 percent, and (3) the repeal of previously

scheduled increases in the dependent care and medical deductions. These rule changes exerted

downward pressure on the number of eligibles and, to a lesser extent, on the number of participants.

However, the number of eligibles and the number of participants actually increased between 1982 and

1984, due to the more powerful influence of the recession and the weakening economy, as discussed

in Section B. Hence, although the restrictive legislation may have lowered the number of eligibles

over what it would have been in the absence of the legislation, it was not the dominant influence on

rates between 1982 and 1984.

3. 1985 Food Security Act

The more generous eligibility requirements introduced under the 1985 Food Security Act,

combined with little or no change in the number of participants under an expanding economy, led

to a slight decline in participation rates between 1984 and 1986 (by 4 percentage points). Among

other changes, the 1985 FSA, implemented in 1986, (1) restored automatic eligibility to households

in which all members received AFDC or SSI, (2) separated the shelter and child care deduction limits,

(3) increased the asset limits for elderly persons living alone and for households that did not contain

elderly members, and (4) restored the earnings deduction rate to 20 percent.

As discussed in Trippe and Doyle (1992), the total number of eligible households increased due

to the more generous eligibility criteria of the FSA, but most of those who became newly eligible did

not participate, resulting in the overall decline in participation rates. There are several reasons why

there was no corresponding increase in the number of participants in the year and a half after the

expanded provisions were implemented. First, the economy was still expanding between 1984 and

1986, creating an environment in which households becoming newly eligible due to legislative changes

45
were less likely to seek assistance. Second, most of the newly eligible households were made eligible

by the expanded asset provisions, particularly for households that contained elderly, single persons.

Households containing elderly, single persons have historically participated at much lower~thanaverage rates and have received lower-than-average benefits. Finally, the expanded eligibility criteria

were relatively subtle, so it is not too surprising that the increase in eligibles that was simulated in

the model, was not reflected by an increase in participants.

4. The Homeless Assistance Act

The Stewart B. McKinney Homeless Assistance Act introduced some changes in FSP outreach,

benefit levels, and application procedures that may have increased FSP participation among eligibles

between 1988 and 1990, contributing to the 6 percentage point rise in participation rates. In

particular, the Homeless Assistance Act made changes to the FSP that (1) encouraged homeless

persons to participate in the program, (2) increased the availability of expedited service, and (3)

changed the definition of the FSP household so that parents with children who live with relatives

could form a separate FSP household.

No data are available for determining whether the number of homeless persons participating in

the FSP actually increased. However, McConnell (1991) found that households without earnings or

shelter costs increased substantially after the Homeless Assistance Act was implemented. McConnell

found that these households accounted for over 40 percent of the increase in households entering

the FSP between FY 1989 and FY 1990. At least some of the increase in households entering the

FSP without earnings or shelter costs is probably due to an increase in the number of homeless

"households" entering the program. In addition, McConnell found that the number of households

that received expedited service when they entered the FSP more than doubled between FY 1987 and

FY 1990. It is also likely that the change in the definition of the FSP household added to the

increase in FSP participation, because households with children represent an increasing proportion

of the households entering the FSP without shelter costs (McConnell, 1991).

46
While the Homeless Assistance Act probably contributed to the increase in FSP participation

between 1988 and 1990, expansions in Medicaid and changing economic conditions were also

determinants. However, it is not clear which of these influences was the major cause of the rise in

participation rates between 1988 and 1990.

5. Immigration Legislation

The 1986 Immigration Reform and Control Act (IRCA) may have contributed to the rise in the

number of participants between 1988 and 1990, resulting in the increase in participation rates. IRCA

granted resident status to two groups of illegal aliens--legally authorized workers and special

agricultural workers. As discussed in McConnell (1991), with the removal of the threat of

deportation, newly legalized workers may have become more willing to apply for food stamps for their

U.S.-born children.

B. SHIYrS IN ECONOMIC CONDITIONS

A second major influence on the change in participation rates is shifts in economic conditions.

In general, during a slowdown in the economy, more people become eligible for the FSP, and more

eligibles choose to participate in the program. Similarly, during a recovery in the economy, fewer

people become eligible for the program and fewer choose to participate. Shifts in economic

conditions often affect the participation rate because the change in the number of participants either

is smaller than the change in the number of eligibles or occurs at a different time. The economic

shifts that had a major effect on participation rates between 1976 and 1990 are discussed in this

section.

47
1. Rising Inflation and Strengthening Economy Between 1976 and 1978

Between 1976 and 1978, the economy was strengthening and rates of inflation were rising. The

number of persons unemployed declined by 7 percent, and the Consumer Price Index (CPI) for all

items went up by 15 percent between 1976 and 1978. Both of these factors probably caused the

number of eligibles to decline, resulting in a rise in participation rates.

The high rate of inflation reduced the number of eligibles because it had the effect of making

the asset and net income guidelines more restrictive. Specifically, the asset limit remained constant

in nominal terms between 1976 and 1978. However, in real terms the asset limit became more

restrictive during this period because inflation increased the value of countable assets relative to the

asset limit. As a result, the number of eligibles passing the asset test declined. In fact, about 5.1

million of the 10.3 million decline in the number of eligibles was due to a decline in the number of

eligibles passing the asset test.

Similarly, although the net income guideline increased between 1976 and 1978, it did not increase

by as much as inflation, due to the lagged effect of the indexing procedure for the net income

guideline. The net income guideline for each year between 1976 and 1978 was tied to the food price

index for a previous time period (such as the previous year). The food price index increased by 3

percent between 1975 and 1976, by 6 percent between 1976 and 1977, and by 10 percent between

1977 and 1978. Since the indexing of the net income guideline is lagged, the guideline did not

increase by as much as inflation in any given year. For example, the net income guideline increased

by only 5 percent between September 1976 and February 1978, while the food price index increased

by 11 percent during this period. Hence, the net income guideline became more restrictive in real

terms, and the number of eligibles declined)

1This assumes that incomes for low-income households rose at the rate of inflation between 1976

and 1978 (or by at least 5 percent). While this assumption is largely true, it may not be true for all

low-income persons, particularly those on fixed incomes. For example, in some states, AFDC benefits

may not have been indexed, and thus the number of eligible persons receiving only AFDC income

in some states would have increased rather than decreased between 1976 and 1978.

48
The high rate of inflation and improving economy between 1976 and 1978 decreased the number

of eligibles by more than the number of participants, resulting in an increase in the participation rate.

The decline in the number of eligibles was greater than the decline in the number of participants

because those losing eligibility were largely higher income persons on the margin of financial

eligibility, who are less likely to participate.

While rates of inflation were even higher in other periods of the analysis, such as between 1978

and 1980, the high rates of inflation combined with the strengthening economy between 1976 and

1978 were the dominant influences on participation rates.

2. Weakening Economy between 1978 and 1980

Between 1978 and 1980, the economy was weakening, prices were rising, and energy costs were

increasing. The Consumer Price Index (CPI) for all items went up 24.5 percent between 1978 and

mid-1980. The weakening economy increased the number of eligibles while the rising inflation

probably decreased the number of eligibles. Hence, the net effect of the changes in the economy

between 1978 and 1980 was probably very small. The 1977 legislation was the dominant influence,

causing participation rates to rise.

3. Recession between 1980 and 1982

Between 1980 and 1982, the economy was in recession. The number of unemployed persons

rose substantially (by 19 percent), as illustrated in Figure V. 1. Between 1980 and 1982, the number

of eligibles increased by 7 percent, while the number of participants increased only by 2 percent,

generating a decline in overall participation rates of 4 percentage points. The number of eligibles

increased by more than the number of participants during the recession for two likely reasons: (1)

the newly eligible might have been less likely to apply for food stamps because they could draw on

other resources (such as assets or a second earner) for a short period of time, and (2) the newly

49
FIGURE V. 1

NUMBER OF ELIGIBLES, PARTICIPANTS

AND UNEMPLOYED PERSONS

Persons (Millions)

60

50

40

30

FSP Participating Persons

20

Unemployed Persons

10

0 I I I { I I

Sept. 1976 Feb. 1978 Aug. 1980 Aug. 1982 Aug. 1984 Aug. 1986 Aug. 1988 Aug. 1990

Month/Year

50
eligible might have delayed applying for food stamps because they believed that their economic

hardship would be short term.

The participation rate probably would have declined more between 1980 and 1982 had the

restrictive 1981 OBRA legislation not been passed. The OBRA legislation reduced the number of

eligibles, thus dampening the increase in eligibles due to the recession.

4. Recovery between 1984 and 1986

The economy was recovering between 1984 and 1986, exerting some downward pressure on the

number of eligibles and participants. However, as discussed earlier, the more generous eligibility

criteria implemented under the 1985 Food Security Act substantially increased the number of

eligibles. Hence, the expansion in the number of eligibles under the 1985 FSA, combined with a

slight decline in the number of participants under the growing economy, led to an overall decline in

participation rates between 1984 and 1986.

5. Weakening Economy In 1990

While the economy was still strong at the national level in 1988 and 1989, it began to weaken

in 1990. The number of unemployed persons increased from 6.5 million in 1989 to 6.9 million in

1990, after a steady decline since 1982. Furthermore, according to McConnell (1991), in such areas

of the country as New England and the Middle Atlantic and East North Central, states began to

suffer a recession earlier than the country as a whole between 1988 and 1989. Hence, the recession

is partially responsible for the 12 percent increase in FSP participation between 1988 and 1990.

However, as shown in Table IV.l, the number of eligibles remained relatively constant over the

period, increasing participation rates by 6 percentage points.

The likely decline in the number of eligibles during the strengthening economy of 1988 and 1989,

combined with the rise in the number of eligibles during the weakening economy of 1990, probably

stabilized the total number of eligibles. However, the substantial rise in the number of participants

51
during the 1988 to 1990 period without an increase in the number of eligibles indicates that (1) as

the economy began to weaken--as early as 1989 in some regions of the country--the number of

participants increased among the already existing FSP eligibles, and that (2) other factors added to

the rise in the number of participants without affecting the number of eligibles. In particular, the

expansion in Medicaid and the changes made under the Homeless Assistance Act increased the

number of participants without substantially affecting the number of eligibles.

C. CHANGES IN OTHER PROGRAMS CLOSELY ASSOCIATED WITH THE FSP

In addition to changes in FSP legislation and shifts in the economy, changes in other programs

that are closely associated with the FSP may affect program participation rates. The effects of these

programs are discussed in this section.

1. Expansions in Medicaid

The expansion in the Medicaid program between 1988 and 1990 increased the number of FSPeligible women and children who participated in the FSP (see McConnell, 1991). The Medicaid

expansion helps explain the substantial rise in the number of participants between 1988 and 1990

without a concomitant rise in the number eligibles, thus increasing participation rates. Specifically,

the Medicare Catastrophic Act required that, by July 1988, states increase the Medicaid income

eligibility limit for all pregnant women to at least 75 percent of the poverty level, and that by April

1990 they increase it for ali pregnant women and children under age 6 to at least 133 percent of the

poverty level. The legislative changes also encouraged states to increase their outreach programs and

streamline their application processes. The Health Care Financing Administration (HCFA) reported

that the number of Medicaid recipients rose dramatically, by about 2.5 million (11 percent), between

FY 1989 and FY 1990.

The changes in the Medicaid program did not increase the number of persons eligible for the FSP

because no direct link exists between eligibility for the Medicaid and the FSP programs. However,

52
the changes increased the number of FSP-eligible women and children who participated in the FSP

because (1) Medicaid eligibility workers may have informed applicants about the FSP program

benefits and eligibility guidelines, and (2) for persons already applying for Medicaid, it might have

been less burdensome to apply for food stamps at the same time. Furthermore, some states share

a common application form, and the Medicaid and FSP offices are often located in the same building.

McConnell (1991) estimated that the number of FSP participants who may have been directly

affected by the changes in the Medicaid eligibility limits--women age 14 to 59 and children under age

7 who received Medicaid but not AFDC--increased by about 250,000 between the first two quarters

of FY 1989 and the first two quarters of FY 1990. Hence, McConnell concludes that about 25

percent of the increase in FSP participation between FY 1989 and FY 1990 can be explained by the

expansions in the Medicaid program.

2. Indexing of Supplemental Security Income and Social Security Benefits

Households receiving Supplemental Security Income (SSI) or Social Security benefits have kept

up with or done better than inflation over the period of the analysis because both of those programs

are indexed. On the other hand, households that depend primarily on AFDC or General Assistance

have fallen substantially behind the pace of inflation, since most states do not index those programs.

In addition, many households with wage income have not kept up with inflation. About 40 percent

of all food stamp households receive AFDC or General Assistance, and about 20 percent have wage

income. However, since the majority of Social Security recipients and a smaller but significant

proportion of SSI recipients are elderly, the elderly groups of food stamp recipients both have fared

better in a relative sense and are affected less by changes in the economy than other groups of food

stamp recipients, such as those who receive AFDC or earnings. Hence, during the recession of 1980

and 1982, when the number of eligibles and participants was generally increasing, elderly eligibles and

participants were not affected as much because their SSI and Social Security benefits are indexed.

53
3. AFDC Program

Although participation in the AFDC program is highly correlated with participation in the FSP,

there is no evidence that changes in the AFDC program cause changes in participation in the FSP

program. That is, some of the factors that affect FSP participation, such as changes in the economy

or changes in the Medicaid program, also affect AFDC participation, but changes in the AFDC

program per se have not caused any major changes in the number of participants in the FSP program.

D. SUMMARY

Table V. 1 summarizes the dominant influences on the changes in participation rates from 1976

to 1990. In summary, the dominant influences causing the observed trends are:

1. The r/se in participation rates between 1976 and 1978 was largely due to rising

inflation combined with a strengthening economy. Rising inflation had the effect of

making the asset and net income guidelines more restrictive, thus reducing the

number of eligibles. The strengthening economy also reduced the number of

eligibles. The number of eligibles declined more than the number of participants,

leading to a 7 percentage point increase in participation rates.

2. The substantial r/se in participation rates between 1978 and 1980 was principally caused

by legislative changes to the FSP under the Food Stamp Act of 1977. Under the 1977

legislation, the number of participants increased due to the elimination of the purchase

requirement, and the number of eligibles declined due to restrictive changes in the

program, leading to a more than 16 percentage point increase in participation rates.

3. The minor drop in participation rates between 1980 and 1982 was largely due to the

recession. The number of eligibles increased more than the number of participants,

leading to a 3 percentage point decline in participation rates.

4. The minor drop in participation rates between 1984 and 1986 was due to the more

generous eligibility requirements introduced under the 1985 Food Security Act. The

changes in eligibility criteria under the 1985 Act immediately increased the number of

eligibles, but the newly eligible population did not respond by entering the program,

leading to a 4 percentage point decline in participation rates.

5. The r/se in participation rates between 1988 and 1990 was due to an increase in the

number of FSP participants with little change in the number of eligibles. The

expansion in the Medicaid program was the major factor causing an increase in the

number of participants. The Medicaid expansions were associated with little or no

change in the number of eligibles because they increased participation among already

existing FSP eligibles. Increased outreach and expedited service, and immigration

legislation granting resident status to certain aliens may also have increased the number

54
of participants. The substantial increase in the number of participants, combined with

almost no change in the number of eligibles, lead to a 6 percentage point increase in

participation rates.

55
REFERENCES

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.

Brown, G. "Food Stamp Program Participation and Non-Food Expenditures." Washington, DC:

Division of Consumer Expenditure Surveys, Bureau of Labor Statistics, U.S. Department of

Labor, 19ggb.

Czajka, J.L., "Determinants of Participation in the Food Stamp Program: Spring 1979." Report to

Food and Nutrition Service, U.S. Department of Agriculture. Washington, DC: Mathematica

Policy Research, Inc., 1981.

Doyle, Pat. 'Mn Analysis oflntra-Year Income Receipt". Report prepared for the Food and Nutrition

Service, U.S. Department of Agriculture. Washington, DC: Mathematica Policy Research, Inc.

1984.

Doyle, Pat, "Food Stamp Program Participation Rates: August 1985." Current Perspectives on Food

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

of Agriculture, 1990.

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, Ann Huff, Kirsten Coffin, and Carole Trippe. "The MATH Technical Description:

Current Services Files." Report to the Food and Nutrition Service, U.S. Department of

Agriculture. Washington, DC: Mathematica Policy Research, Inc., 1990.

Martini, Alberto. "Participation in the Food Stamp Program: A Multivariate Analysis." Current

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

U.S. Department of Agriculture, 1992.

McConnell, Sheena. "The Increase in Food Stamp Program Participation Between 1989 and 1990:

A Report To Congress." Alexandria, VA: Food and Nutrition Service, U.S. Department of

Agriculture, 1991.

Ponza, Michael, and Linda Wray. Quick Response Study II. Evaluation of the Food Assistance

Needs of the Low-Income Elderly and Their Participation in USDA Program (Elderly Programs

Study. Report prepared for the Food and Nutrition Service, U.S. Department of Agriculture.

Washington, DC: Mathematica Policy Research, 1990.

Ross, C. "The Food Stamp Program: Eligibility and Participation." Washington, DC: Congressional

Budget Office, 1988.

57
Ruggles, Patricia and Richard C. Michel. "Participation Rates in the Aid to Families with Dependent

Children Program: Trends for 1967 Through 1984." Washington, DC: The Urban Institute,

1987.

Shiels, John F., Burt S. Barnow, Katherine A. Chanrette, and Jill M. Constantine. "Elderly Persons

Eligible For and Participating In the Supplemental Security Income (SSI) Program." Vienna,

VA: Lewin/ICF, 1990.

Trippe, Carole. "Estimating 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.

Trippe, C., and H. Beebout. "Food Stamp Program Participation Rates Among the Poverty

Population, 1980-1987." Current Perspectives on Food Stamp Program Participation. Alexandria,

VA: Food and Nutrition Service, U.S. Department of Agriculture, 1988.

Trippe, Carole, and Pat Doyle. "Food Stamp Program Participation Rates: January 1988." Current

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

U.S. Department of Agriculture, 1992.

U.S. Department of Agriculture, Food and Nutrition Service. "Effects of the 1977 Food Stamp Act".

Second Annual Report to the Congress, Jan. 1981. Alexandria, VA: Food and Nutrition

Service, U.S. Department of Agriculture, 1981.

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

"Characteristics of Food Stamp Households: Winter 1988." Alexandria, VA: Food and

Nutrition Service, U.S. Department of Agriculture, 1990.

U.S. Department of Commerce, Bureau of the Census. "Characteristics of the population below the

poverty level: 1978." Current Population Reports, series p.60, no. 124. Washington, DC: U.S.

Government Printing Office, 1980.

U.S. Department of Commerce, Bureau of the Census. "Characteristics of Households receiving

noncash benefits: 1980." Current Population Reports, series p.60, no. 128. Washington, DC:

U.S. Government Printing Office, 1981.

U.S. Department of Commerce, Bureau of the Census. "Characteristics of the population below the

poverty level: 1981." Current Population Reports, series p.60, no. 138. Washington, DC: U.S.

Government Printing Office, 1983.

U.S. Department of Commerce, Bureau of the Census. "Money Income and Poverty Status in the

United States: 1989." Current Population Reports, series p-60, no. 168. Washington, DC: U.S.

Government Printing Office, 1990.

58
APPENDIX A

TECHNICAL PROCEDURES USED TO COMPUTE

ELIGIBLE PERSONS, HOUSEHOLDS, AND BENEFITS
APPENDIX A

TECHNICAL PROCEDURES USED TO COMPUTE

ELIGIBLE PERSONS, HOUSEHOLDS, AND BENEFITS

As noted in the text, simulations of eligible persons, households, and benefits were based on

data from the March Current Population Survey. Eight different CPS files were processed, one for

each year of the analysis. The CPS is not perfectly suited to simulate eligibility under the Food

Stamp Program for three reasons: (1) it lacks a monthly accounting period, (2) it reflects

considerable underreporting of income, particularly among cash welfare programs, and (3) it omits

information on assets, deductible expenses, and food stamp units. Nonetheless, it is the only

nationally representative survey that provides measures of income and demographic characteristics

that were available continuously throughout the time frame of this study.

This Appendix provides detailed information on how we used the survey to determine program

eligibility, and how we compensated for deficiencies in the data. Section A provides an overview of

the CPS and changes made to the survey during the time frame of this study. Section B describes

how we initially processed each file, including how we generated an extract file and estimated

monthly income. Section C discusses how we imputed program unit, gross income, and assets to

households on the initial extracts. Section D discusses how we computed net income for those

households. The Appendix concludes with an outline of the simulation model which relies on the

constructed variables described in sections B through D, as well as an assessment of the outcome

of that model.

A. THE MARCH CURRENT POPULATION SURVEY

The March Current Population Survey (CPS) is a nationally representative survey of households

in the United States repeated annually. Each survey measures demographic and labor-force

information for March, the month in which the interviews are conducted, and annual retrospective

61
income and employment information for the preceding calendar year. The demographic data include

age, race, sex, marital status, educational attainment, family structure, and place of residence. The

economic data include current and retrospective labor-force participation and annual income from

wages and salaries, self-employment, cash transfers, assets, and other sources.

The surveys underlying this study were conducted every other year beginning in 1977 and

running through 1991. During that time the questionnaire content remained relatively stable, with

one principal exception: the questions on types and amounts of income received were significantly

improved between the March 1978 and March 1980 CPS. 1 In addition, the Census Bureau

periodically made changes in data processing prior to releasing the public-use file. These changes,

outlined in Table A.1, had an impact on the poverty rates and, we presume, on the estimates of food

stamp eligibles. However, the changes in the poverty rates are not large relative to the observed

changes in the eligible pool, as illustrated below:

· The questionnaire changes that occurred between the March 1979 and March 1981

CPS files generated a .9 percent decline in the overall individual poverty rates for

1978 (CurrentPopulation repons, P-60, no. 124).

· The processing changes that occurred between the March 1981 and March 1983

CPS files generated a 1.5 percent increase in the poverty rate (CurrentPopulation

repons, P-60, no. 138).

· The processing changes that occurred between the March 1983 and March 1985

CPS files generated a .7 percent increase in the individual poverty rate in 1990

(U.S. Department of Commerce, 1986).

· The processing changes that occurred between the March 1987 and March 1989

CPS files generated a .7 percent reduction in the poverty rate (U.S. Department

of Commerce, 1990.)

IThe new instrument represented an improvement in the collection of income data in three ways:

it contained more probes to identify circumstances associated with income receipt, a more detailed

enumeration of income sources, and more explicit records of jointly received income among

husbands and wives.

62
TABLE A. 1

CHANGES IN THE MARCH CPS OVER TIME

March Data

Year Year Changes in Design or Weighting from Previous Year

78 77 None

79 78 Changes in metro-nonmetro definitions

New, more detailed income questions were introduced for 2 rotation

groups.

80 79 Definition of adult changed from age 14 to age 15.

New concept of families and headship status

New income questions were introduced for all rotation groups.

81 80 New weighting procedure based on 1980 Census was introduced which

increased the overall population by 2.3 percent and had a

disproportionate impact on Hispanics.

82 81 Top coding of income variables was increased from $50,000 to

$75,000.

83 82 New industry and occupation coding

New definition of group quarters

The poverty index was modified slightly (deleting the farm/nonfarm

dimension).

84 83 The March 1984 file was issued twice. In the second (unofficial)

version, the Bureau introduced the revised weighting procedure

developed for the March 1985 CPS.

85 84 Revised weighting procedures -- specifically, the control on Hispanics

was changed. This caused a slight increase in poverty with

disproportionate impacts on the Hispanic population, male unrelated

individuals, and persons in related subfamilies.

Changes in the designation of metro/nonmetro, farm/nonfarm, central

city/noncentral city statuses

86 85 More metro/nonmetro changes

87 86 None

88 87 None

89 88 Revised processing procedures increased income overall and reduced

poverty. The poverty rate changed more severely for blacks and

persons in selected age ranges.

90 89 None

91 90 None

63
B. INITIAL PROCESSING

Because the Food Stamp Program serves the low-income population, we initially reduced the

size of each CPS file by excluding households whose income exceeded 250 percent of poverty who

did not report receiving food stamps or cash welfare (AFDC, SSI, or GA) at least once during the

previous calendar year. This procedure reduced processing costs but, more importantly, reduced the

bias introduced with our using administrative data to assign net income (discussed in Section D).

Once the size of the file was reduced, we estimated a monthly income stream from the reported

annual amounts. Income was grouped into four categories, which we treated differently:

· Earnings. The model first allocated periods of work within the year according to

a random assignment of reported weeks worked to calendar months with one

exception: periods of the work of husbands and wives were forced to overlap by

at least one month based on the research of Doyle (1984). The model then

allocated earnings evenly over months of work.

· Unemployment Compensation. The allocation model applied to this project assigned

unemployment compensation randomly within periods of nonwork, as long as the

individual worked less than the full year. The annual amount was then allocated

evenly over that period. 2 For full year workers, the model evenly allocated the

annual amount over the year.

· Noncash Transfers and Other Nonasset Income. The model for this project applied

a different method for allocating unearned income depending on a person's age

and type of income. Elderly recipients had the amount allocated evenly over the

full year. For nonelderly recipients, the model used a three-step procedure. First,

the model randomly determined the number of months in which this income

source was received, based on probabilities that varied by types of income

2prior to the March 1989 CPS, amounts received for Unemployment Compensation were lumped

together with amounts received for Veterans' benefits and Workers' Compensation, while receipt

was identified separately. Hence, based on Doyle et. al., (1990), we allocated the lump-sum amount

to component parts before allocating annual benefits to monthly amounts. The procedure was as

follows. If the receipt of all three amounts was reported, we allocated 40 percent of the total to

Veterans' benefits, 21 percent to Unemployment Compensation, and the balance to Workers'

Compensation. If any two pair were reported received, we allocated the total amount as follows:

Veterans (65 percent) and Unemployment Compensation (35 percent)

Veterans (51 percent) and Workers' Compensation (49 percent)

Unemployment Compensation (36 percent) and Workers' Compensation (64 percent)

64
developed in Doyle (1984). Second, the model assigned the period of receipt

randomly within the year. Third, the model allocated the amount evenly over the

assigned period of receipt.

· Other. We allocated cash welfare (AFDC, SSI, and GA) and asset income evenly

over the full year, because sufficient information was not available to do otherwise.

C. DEVELOPING THE UNIT AND UNIT.LEVEL GROSS INCOME AND ASSETS

We enhanced the initial CPS extracts with measures of the food stamp unit, the gross income

of the unit, and the asset holdings of the unit, all of which were required to simulate food stamp net

income and eligibility.

1. The Food Stamp Unit

The food stamp household differs from the Census household concept in that the program unit

is based on shared food purchase and preparation in addition to shared living quarters, while the

Census household definition is based only on shared living quarters. The unit of observation in the

CPS is the Census household, and adults within that unit are interviewed to collect CPS data. We

would have liked to model the food stamp unit but were unable to do so, because the CPS lacks

information on shared food purchase and preparation. However, we captured one aspect of the unit

definition: SSI recipients who receive cash in lieu of food stamps in SSI cashout states were

excluded from the unit. The cashout states were California and Wisconsin in all years and

Massachusetts in 1976 and 1978.

2. Gross Income

Once the unit was constructed, we developed estimates of the unit's gross income by summing

monthly income over members of the unit. The monthly income allocation routine assigned income

to 12 months of each year processed. However, we selected only one month for analysis

corresponding to the reference period of the administrative data discussed in Chapter III. Gross

income reflected the sum of person-level income assigned to that month.

65
3. Asset Balances

The assets of the food stamp unit were imputed on the basis of annual income from interestbearing accounts, rental property, and other assets. The balance that was assigned equaled the

income amount divided by 6.5 percent. This procedure, used by the MATH model until very

recently, has some obvious problems: (1) it omits countable assets other than financial assets, the

most important of which are vehicles, and (2) it yields a very uneven distribution of asset balances

because asset income on the CPS tends to be reported in $50 intervals. 3 Doyle (1990) used SIPP

data to estimate the impact of using this approximation of asset balances in lieu of full details on

countable financial assets to simulate food stamp eligibility. Doyle found that using the proxy for

financial assets (together with reported vehicular assets) in lieu of actual financial assets (plus

vehicular assets) generated a 4 percent increase in eligible households and a 3 percent increase in

eligible individuals in August 1985. Unpublished statistics from the same data source show that

using just a proxy for financial assets (i.e., to cover both financial and vehicular assets) would

increase eligible households by 10 percent (and eligible individuals by 12 percent) relative to using

a proxy for financial assets plus actual vehicular assets. 4

D. ESTIMATING NET INCOME

Because food stamp net income cannot be constructed from the information available on the

CPS, we used a four-stage imputation procedure to assign food stamp net income to households in

the analysis files. We first estimated a single ordinary least squares (OLS) regression equation for

each of the even-numbered years between 1976 and 1990 inclusive, in order to obtain parameter

estimates that represented the relationship between a set of food stamp unit characteristics and food

3A Memorandum from Tom Fraker to Steven Carlson dated January 24, 1984 discusses the

uneven distribution of imputed asset balances.

4A memorandum from Pat Doyle to Marian Lewin dated August 14, 1989 finds that the

estimates quoted here are equivalent to the impact of eliminating the vehicular component of the

asset test.

66
stamp net income. We used case record survey data to estimate these equations. In the second

stage, we applied these year-specific sets of parameter estimates to the CPS extracts from

corresponding years to predict food stamp net income for sample households. 5 We then added a

stochastic error term to the predicted values, in order to produce imputed values of net income with

the observed amount of variation across the sample observations. 6 In the final stage, we set bounds

on these imputed values so that no records would receive imputed values that either exceeded gross

income minus the food stamp standard deduction or fell below zero dollars. 7

This section describes how we developed the imputation equations, focusing on the data used

for estimation, alternative methods of estimation, and the results.

1. Data

We used case record survey data (discussed in Chapter III) for each even-numbered year

between 1976 and 1990 inclusive, to estimate the eight corresponding-year imputation equations.

Our analysis files excluded households with zero gross income, since, by definition all such

households have zero net income. We also excluded Earned Income Tax Credit (EITC) income

from the earned income variable derived with the administrative data, since it is omitted in the CPS.

Finally, we excluded Puerto Rico from the 1976 and 1978 data in order to be consistent with data

in the other years.

We have one primary concern about using administrative data to impute net income to the CPS.

Specifically, the imputation equations estimated with these data reflect relationships for a sample

of food stamp participants; however, we applied them to a sample of low-income households that

5As discussed below, the equations were not applicable to households with zero gross income.

We assigned zero net income to these cases.

6For each CPS household record, MPR generated a stochastic error term from a normal

distribution with a mean equal to zero and a standard deviation equal to the standard error of the

regression.

7prior to 1980, the upper bound on imputed net income was gross income, since a standard

deduction did not exist.

67
may differ in important ways. In particular, because some CPS households have higher incomes than

the food stamp participating households found in the administrative data, the estimated relationship

between the explanatory variables and net income may not hold for these CPS households.

Consequently, the predicted value of net income for these households may be systematically biased.

2. Alternative Methodologies

As noted earlier, we developed a single OLS regression equation in each year to predict food

stamp net income. We considered using two alternative methodologies for imputing food stamp net

income. The first would have imputed food stamp net income on the basis of information available

on the average ratio of net income to gross income for households in different gross income

categories (e.g., $0 to $100 per month, $101 to $200 per month, etc.) to determine net income. 8

However, we had reservations, because there are other important predictors of food stamp net

income that, if used in the procedure would have made the imputed values more accurate.

The second methodology, which is considerably more complicated, would have used the

parameter estimates generated by a tobit model to impute food stamp net income. Analytically, the

tobit model approach would have been preferred over the OLS approach, since the tobit model

would have allowed us to incorporate information on households with zero gross income. We would

not have felt comfortable in doing so with the OLS approach, since OLS parameter estimates are

biased when a large number of zero values on the dependent variable exist. However, we were

unable to use the tobit-based procedure because it is substantially more resource-intensive than the

OLS approach.

3. The Results

We used a single model specification for the seven OLS regression equations to ensure that net

income would be imputed consistently over time, including an identical set of independent variables

8This information was generated from administrative data.

68
and an identical functional form in all seven estimated equations. 9 We developed this model

specification from two sets of preliminary specifications--one generated with 1984 data, and the other

with 1988 data.

The final model is shown as equation (A.1):

(A.1) NET i = a + Y_,BjXij+ Vi,

where, for the "ith" household, NET is food stamp net income, X is a vector of independent

variables, and V is the error term. These independent variables include earned income, the square

of earned income, unearned income, the square of unearned income, a flag indicating households

whose gross income is less than or equal to $100, a flag indicating households that resided in Alaska

at the time of the interview, a flag indicating households that resided in Hawaii at the time of the

interview, a flag indicating households that resided in the Midwest at the time of the interview, a flag

indicating households that resided in the South at the time of the interview, and a flag indicating

households that resided in the West at the time of the interview.

Table A.2 presents the regression results for each of the OLS equations. In all equations, all

of the income variables are statistically significant at the .05 level, except the square of unearned

income in the 1978, 1982 and 1988 models, l0 The coefficients on earned income and unearned

income are always positive, and the coefficients on their square terms are typically also positive,

suggesting that net income increases with both earned and unearned income at an increasing rate.

In all equations, the coefficient on the flag that indicated households whose gross income is less than

9The 1976 administrative data did not sample Alaska residents; consequently, a flag which

indicates households that resided in Alaska was not included in the 1976 regression. This is the only

difference in specification between the 1976 equation and the other six equations.

10The SAS-generated standard error estimates and t-statistics assume that the data were drawn

from a simple random sample. Because the data were drawn from a stratified random sample, the

standard error estimates and t-statistics presented are only approximations; however, we do not

believe that this will usually affect our ability to infer statistical significance.

69
TABLE A.2

RESULTS FOR THE FOOD STAMP NET INCOME REGRESSION EQUATIONS

(Standard Error Estimates in Parentheses)

Coefficients Estimated Using Administrative Data For:

Explanatory Variable 1976 1978 1980 1982 1984 1986 1988 1990

Constant -60.0383* -62.9407* -125.9960' -185.4315' -169.8675' -186.3751' -204.8244* -196.4351'

(2.9524) (3.2940) (3.5619) (4.4493) (3.4631) (3.0435) (2.9655) (4.0839)

Earnings 0.7809' 0.7422* 0.7715' 0.8254* 0.8062* 0.7900* 0.7353* 0.7049'

(0.0101) (0.0108) (0.0127) (0.0131) (0.0097) (0.0062) (0.0084) (0.0092)

Earnings Squared -0.000102* -0.000012 0.000067* 0.000037* 0.000044* 0.000020* 0.000076* 0.000076*

(0.000013) (0.000012) (0.000015) (0.000013) (0.0(IX_) (0.000004) (0.000008) (0.000007)

Unearned Income 0.9064* 0.9253* 0.9562* 1.0348' 0.9634* 0.9440* 1.0086' 0.8863'

(0.0157) (0.0171) (0.0187) (0.0184) (0.0124) (0.0097) (0.0054) (0.01319)

Uneamexl Income Squared 0.0000663' 0.000025 0.000109* -0._0026 0.000073. 0.000087* 0.000002 0.00012*

(0.000023) (0.000024) (0.000025) (0.000022) (0.000013) (0.000009) (0.000002) (0.000012)

i_ Flag for Households with Gross 10.6218' 18.0543' 59.9508* 90.8267* 92.4235* 112.8131' 126.1543' 117.1564'

Income < $100 (3.6488) (4.4236) (4.7778) (6.2122) (5.4448) (4.7698) (5.6708) (6.5974)

Flag for Households Residing in NA -60.8075' -20.6258* -38.4529' -42.1620' -50.9189' -52.6491' -35.4125'

Alaska (9.7622) (6.8873) (17.3631) (14.9779) (12.6897) (11.8503) (11.9143)

Flag for Households Residing in 23.9860* 5.5784 -1.4705 -38.3475* -33.7594* -26.5311' -39.9692* 12.7144

Hawaii (8.5449) (6.5567) (3.6057) (7.4509) (5.7024) (6.7390) (7.6094) (7.9143)

Flag for Households Residing in 24.4276* 13.5778' 4.3647* 26.6802* 15.9736' 16.3730' 16.1722' 22.1803'

the Midwest (1.8605) (2.1125) (2.1379) (2.9609) (2.3582) (2.1788) (2.4354) (2.6508)

Flag for Households Residing in 36.3114' 33.0194' -0.3296 42.4122' 19.6970' 25.9688* 32.5873* 36.7736*

the South (1.7108) (1.9284) (2.0657) (2.6281) (2.2891) (2.1389) (2.3697) (2.6055)

Flag for Households Residing in 13.9124' 10.5384' -1.6665 25.5066* 18.2787' 16.1168' 17.9284' 23.4548*

the West (2.0378) (2.4481) (2.7431) (3.0763) (2.6038) (2.2460) (2.5100) (2.7491)

SampleSize 10,690 13,580 3,743 6,345 6,348 10,349 9,942 9,842

R 2 0.8080 0.7380 0.9240 0.8634 0.9196 0.9042 0.8930 0.8803

AdjustedR2 0.8078 0.7378 0.9238 0.8632 0.9195 0.9041 0.8929 0.8801

· Indicates significance at the .05 level using a two-tail t-test. Coefficients identified as significant at the .05 level are those with t-values greater than 1.96.
negative value of the constant term is misleading, since it seems to suggest that the lowest-income

households have negative net income. However, since the coefficient on the variable that indicated

households whose gross income is !ess than or equal to $100 is positive (all else equal), these

equations will predict positive values of net income for the lowest-income households.

In virtually all of the models the coefficients on the three region variables (the Midwest, the

South, and the West) are significant and positive, while the coefficients on the Alaska and Hawaii

flags are significant and negative. These results suggest that, when we controlled for gross income

and the other variables in these equations, residents of the Midwest, the South, and the West tended

to have higher values of net income relative to the Northeast (the excluded category in thc

regressions). The signs of the coefficients on the Alaska and Hawaii variables vary considerably

more. Because we are regressing one component of gross income--net income--on earned income

and unearned income (which sum to gross income), the equations have a wealth of predictive power.

The adjusted R-squared of these equations varies from a low of .7325 for the 1978 equation to a

high of .9238 for the 1980 equation.

We experimented with alternative specifications using the 1984 and 1988 data to determine the

final specification for all the equations. We included different combinations of additional

independent variables, primarily variables thought to serve as proxies for food stamp deductions.

These variables include different representations of household size, the presence or number of

elderly household members, and the presence or number of children younger than age 5. The

household- size variables were not included in the final model because--regardless of the functional

form used--their coefficients were tremendously unstable across different years. The other variables,

which were included to serve as proxies for deductions and thus expected to have negative

coefficients, consistently had positive coefficients. Because we could not determine why these

coefficients should be positive, we excluded the variables from the model. In addition, we

71
experimented with a log-linear specification, but discovered that predicted values generated with the

linear model fit the data better than those generated with the log-linear model.

E. SIMULATING PROGRAM ELIGIBILITY

We developed a model of food stamp eligibility criteria based on estimated asset balances and

gross and net monthly income, and applied the model to each analysis file developed for this project.

We parameterized the model to capture changes in the program eligibility criteria over time. The

parameters and the assigned values are listed in Table A.3. The general procedure was as follows:

· Unless exempt, units were subject to an asset test whereby assets were compared

with the limits in Table A.3. Units whose assets exceeded the appropriate limit

were ineligible. In selected years, certain cash assistance households were not

subject to the asset test because they were deemed to be automatically eligible for

food stamps.

· Unless exempt, units were subject to a gross income test for all years except 1976,

1978, and 1980. If gross income exceeded the appropriate limit, the household

was not eligible for food stamps. In selected years, certain cash assistance

households were not subject to the gross income test because they were deemed

to be automatically elig/ble for food stamps. Households that contained an elderly

or disabled individual were exempt from the gross income test in all years.

· Unless exempt, units were subject to a net income test whereby net income was

compared with the appropriate limits in Table A.3. Units whose income exceeded

the appropriate limit were ineligible. In selected years, certain cash assistance

households were not subject to the net income test because they were deemed to

be automatically eligible for food stamps.

· Units who were not deemed to be ineligible under one or more of the previous

tests were assigned benefits computed as a function of net income. In 1976 and

1978, benefits were the difference between the coupon allotment, which varied

according to household size, and the purchase requirement, which varied according

to income and household size. In subsequent years, benefits were equal to the

maximum coupon allotment less 30 percent of net income. Table A.3 describes

the maximum coupon allotments, and the Federal Register (July 2, 1976 and

November 8, 1977) documents the purchase requirements.

· Units with positive benefits were deemed to be eligible for food stamps.

The results of the simulations compare favorably with other estimates of thc eligible population

in the literature. Table A.4 compares the 1984 simulation with corresponding simulations developed

72
TABLfi A.3

FOOD STAJ_ BUGIBIUTY f_ 1926TO 19110

,4q_d line Feed Su_p Acl

34dmdkm'JfP74 F,&vm7 le_ d' 1977:As ,'kJk_Jed/n 1979 ,41qpuWfro,1 Aqw.d IfJ_ ,4qud 1044 ,4qud IM/ ,4fqpuf IffM

Food SLMBpACl edf1964 Food SU_p ,Actelf 1_4 Bed I_0. J_llrcc_c _ 1978, OHKA 1981As Mmglded k OBKA M _ k. Food S4_u_ I_1 of 1_7 b _ Hu_r trcvalim A4_d

Amdytm Year Az Amemk_ Al Almelkkd early 197qJ 14_1; Effect_e 10_1 Iq_2; FJioctwe 10_2 I_$; F_ffExti_ S,_J& Act; IgH_

I I I III I I Ill

G_ bio,lc F_ilxhly No 14_1 Not_l Notc_ <- 1.3* Pomrty h&,- 'c' 1.3* PavL'r_ L.mc <" 1.3' Pmmrly lb'"' <- 13" I'ov_rly Lalc < - 1.3" Puvqn'tybK

A,m_J_, SlSGLveo _, _ ,_ koad,,_of,,'---'ZI_,O,, 82_ S-_0e* k,,y_dk,,d,dd,

n,,d,,:,o_, N/A ,,UA .'_ .3 _ .3 ..3 ..3

_ Vm I_ _ me v_ Iq _ me IPmmm Idm F'_ Mm _ Mm _ Mm _ Mm Penom Mm

i S10. I SI8. I Sl8. i SlO. I S!O. I SIO.

2 SIO. 2 SBO. 2 SiC. 2 SIO. 2 SI( 2 _JOl

,, , 3+ $ 0. 3. $ 0. 3+ $ 0. 3+ I e. 3+ S 0. ,. 3+ $ Q.

_r,, · _rA i,io_ 'ln,eanl,y_ale_ HoAm _tm, pbdd,_ HQA,_F_q,bib,y HQA,m 'eJte, ldldy Amn,m,eicdylnlpN, __ A,,,om#cU,yEiC_

_ (.4JI_DCor

SSI), iii i1_

,,,,,_ R,._,._. Y" . L,Ym NQ HQ HQ HQ HQ HQ

Ba__ Ibmc_ - Mmmum bcn4_ (kx,.ddd mt) - _ Ik_ - MMmam bem_ (_ me) - 3 s Foad S_qp HQShxme

f_-,.m _._b,_d_ ,,,dM "-*---_ ..

sst _ _ oddc,../,., wi,_mm. M,mdmmw ,., _

Mom_ Uem Sm US AK HI US AK Hi us A_ HI LIS AX H! US AK Hi US AK HI US AK HI US AK HI

¥qmd i 245 _ 2'73 262 _ 2_L 316 39_ 365 3_0 _ 4_,0 415 S2Q 47B 447 SSt S15 4S9 5'7?. S2A 44J_ 624 $73

setup 2 322 413 4o7 _44 447 42'; 418 s24 4ss 51_ 6_0 897 56o 'Mt 645 6o4 753 dM*S 617 77o ';o9 699 fo6 7,v

f_ 3 433 st3 5m 444 L_3 _ sM 6_ s_ .7 ,10 '745 70s 88:; 811 _0 _50 8'75 w5 M _, 8_ to_ _ss

Joamm 4 $33 '/_3 740 5,1Bo lB'/ T73 &21 TT'/ 715 TlS 9";0 892 8M 1063 978 917 114& 1055 934 1167 10'34 I00_ 124,1 1160

M S dl(dl m 880 dl,67 _ 920 723 904 831 4)04 JIM 1040 _ 1_1.4 114J 1074 13412 12:35 1092 134,3 12.56 1175 1474 1354,

6 '78'7 1073 1053 82'7 1147 1100 823 tOM 948 1832 12q0 1187 1140 142_ 1311 12.3_ ISM 1415 IZSO 1544 1439 134t 1686 1552

7 m Jla'; 1167 ti3 1273 iZZO t_J6 1187 1O4.5 1110 14_4 UO5 12_ 1605 1478 1387 17'XZ 1_93 1409 1762 1621 15*9 1_ 1748

o q,_ 1353 133.3 i047 1453 t:m le2S 12o4 1181 1_ 1610 14sz 14]0 1784 1645 1544 iqrm IW5 1_7 tq,_o 1804 16_ 2111 _s_4

+ i2'Y ,,, 167 164, 133 114 1'73 lC2 127 117 129 .... 160 142 145 181 167 157 1_, lBO 138 tMt 183 170 213 IW, il

_ Sim US AK Ill US AK HI US AK Itl US AK HI US AK HI US jl_ HI US AK HI US AX HI

I 50 61 66 52 '7'2 70 63 'M 84 70 108 95 76 109 108 80 III 124 8'7 113 133 q_ IZ3 131

Imm '2 92 124 122 9(* 134 128 IlS 180 I_38 1Z8 197 17_ 139 20G 198 147 204 22111 159 Z07 244 18Z 227 276

Food 3 134 17411 174 138 1_41 i112 ILS 258 224, 183 2'93 250 199 Z86 2;83 211 293 327 22:8 2_/ 350 240 3Z.5 3_

Siamp 4 i.4, 226 222 174 242 Z}Z 209 327 287 233 359 318 253 364 360 268 372 415 2g0 3'78 444 331 413 5O3

Aim- _ JdJ_ _ 264 _ 281 276 248 388 341 277 4Z6 378 301 43:_ 42'7 318 44Z 493 344 448 _27 393 4_ 5911

mml 6 234, 32:2 316 _ 344 330 24J6 _ 409 33Z 512 453 361 519 513 382 5]4 392 413 538 633 472 5fd8 717

7 262 356 3M 274 3_Z 366 329 513 4_2 367 .Sl,S SOl 399 473 567 422 58& _4 4S7 S9_ 70(t 521 650 7_3

El 2_ 406 4_ 314 4id. 41It 3'76 S89 317 419 646 $72 457 655 _ 483 6'3_ 748 322 _ 8OO 54J_ 743 9u4_

·F 38 Se 50 40 34 5Z 4T 74 65 53 81 72 57 8:2 ti 60 84 tj4 65 8_ lO0 73 93 I IJ

tqOTl_ I_ly psrmmetcn _ _ _ _ m _ _ _ _ _ Pvaso ll_k:ob au:hded from dina for lY78 Md 1978 Imorder lo be _ mtlt c4ba yesfi, md Oumm md tim Vif_m Ld..,.h mm .,_.b,d.d b d yom &
TABLE A.4

INDEPENDENT ESTIMATES OF THE ELIGIBLE POPULATION

IN 1984 AND 1988

CPS MATH SIPP CPS SIPP

1984 1984 1984 1988 1988

Eligible Individuals (thousands) 37,751 37,301 30,359 37,206 30,785

Eligible Households (thousands) 13,987 13,801 12,242 14,640 12,265

BenefitsPayable to Eligible 1,350 1,320 1,060 1,598 1,332

Households (millions)

AverageHouseholdSize 2.7 2.7 2.5 2.5 2.5

AverageBenefits $35.76 $35.39 $34.92 $42.95 $43.3

74
from SIPP (Doyle and Beebout, 1988) and from the MATH model database developed from the

March 1985 CPS (Doyle and Trippe, 1989). It also compares the 1988 simulation with a

corresponding simulation developed from SIPP (Trippe and Doyle, 1992).

For 1984, the two CPS-based estimates of the number of eligible households are nearly identical,

and the two CPS-based estimates of the number of eligible persons and benefits vary by less than

3 percent. As expected, given the more accurate measurement of monthly income and composition,

the SIPP-based estimates of eligible households, persons and benefits are lower than the two CPSbased estimates. Compared with the estimates used in this study, the SIPP-based estimates of the

number of eligible households is about 13 percent lower, while the estimates of persons and benefits

are approximately 20 percent lower.

For 1988, the SIPP-based estimate of the number of eligible households is about 16 percent

lower than the CPS-based estimate developed for this study. The corresponding comparison for both

persons and benefits is 17 percent lower.

It is interesting to note that the average household size among eligible households is 2.5 among

both of the 1988 estimates and among the 1984 SIPP-based estimates. However, among both of the

1984 CPS-based estimates, the average household size is 2.7. The change in average household size

in the CPS estimates when there is no change in the SIPP-based estimates is a curious finding.

However, given that the two independent CPS estimates agree so closely, we do not believe that this

discrepancy signals a problem in the results presented here or elsewhere.

75
APPENDIX B

SELECTED FEATURES OF TltE FOOD STAMP PROGRAM

UNDER PAST AND CURRENT LEGISLATION
TABLE B.1

SELECTED FEATURES OF THE FOOD STAMP PROGRAM UNDER PAST AND CURRENT LEGISLATION

Omnibus Budget

Reconciliation Act of

1981 (PL 86-35) and

Food Stamp

Amendments and

Food Stamp Act of Food Stamp Amendments Reauthorization Act of

Food Stamp Act of 1964 1977 (PL 95-113) of 1979and 1980 (PL 1981 (PL 97-98)

as Amended (PL 88-525) Effective 1-1-79 96-58 and PL 96-249) Effective 10-1-81

Allotment Thrifty Food Plan. Thrifty Food Plan. Thrifty Food Plan. Indexed Thrifty Food Plan.

Indexed since 1971, Indexed annuallyin Jan. based on Indexingfrozen until 7-

indexed semiannually from semiannually based Sept. cost of Plan com- 1-83, next adjustment

1973-1979 based on BLS on Thrifty Food Plan ponents 10-1-84 based on June

foodpriceindex components costofPlan

components

Income Maximum Net income _<maximum Net income < Excludes enerD' assis-tance Gross income _<1.3

food stamp net income poverty line as income. In-cludes poverty,except for

whichwastied to the incomeof ineligiblealiens elderly& disabled,who

maximumcoupon lessprorateshare, keeppreviousnet

allotment income limit

Itemized Payroll, 10% of earnings 20% of earnings, 1980 Act: shelter/child 18% of earnings,

Deductions to $30, child care, child care up to $75, care cap in-dexed annually shelter/child care cap

education, medical over shelter in excess of in Jan. based on Sept./Sept. set at $115 with next

$10, alimony or child 50% of net not to change; 1979 Act: medical inflation adjustment on

support, casualty losses, exceed $75 in expenses over $35 for 7-1-83, with following

shelter in excess of 30% combination with elderly & dis-abled adjustment 10-1-84,

of net childcare. Limit allowed,elderlyand each Oct.thereafter

indexed annually in disabled not sub-ject to the

July based on shelter deduction

shelter-fuel-utilities maximum

component of the

CPI

Standard None $60. Indexedsemi- Indexedannuallyin $85withnextinfla-tion

Deduction annuallyto CPI- JanuarybasedonSept.to adjustment7-1-83,next

nonfoodcomponents Sept. adjustment 10-1-84;

change indexedusingCPInonfoocl, non-homeownership, nonmaintenance of shelter

costs.

Benefit Reduction Basis of issuance tables 30% No change No change

Rate (average30%above

lowest levels)

79
TABLE B.1 (continued)

Omnibus Budget

Reconciliation Act of

1981 (PL 86-35) and

Food Stamp

Amendments and

Food Stamp Act of Food Stamp Amendments Reauthorization Act of

Food Stamp Act of 1964 1977 (PL 95-113) of 1979 and 1980 (PL 1981 (PL 97-98)

as Amended (PL 88-525) Effective 1-1-79 96-58 and PL 96-249) Effective 10-1-81

Accounting Period Prospective month Prospective month States' option: prospective Retrospective becomes

or retro-spective w/monthly mandatory 10-1-83 for

report some households, prospective for others

Eligibilityof Automaticaltyeligible Must meet same No change No change

PublicAssistance conditionsasother

Households households

Asset Limits $1,500; $3,000 for elderly $1,750; $3,000 for $1,500; $3,000 for elderly No change

household of at least two elderly household of household of at least two

persons at least twopersons persons.Excludesvehicles

used for handicapped

Minimum Bonus Minimum t_nus for all, $10 for one- and No change No change

amount varied by two-person househouseholdsize holdsonly

Other Changes Nationwide program Elimination of Increased state incen-tives Tighter definition of

purchase for reducingerror. SSNs household, no extra

requirement required. Limits on eligible benefits for strikers,

students; residents of prorated first month

shelters for battered benefits, Puerto Rico

women & disabled in small block grant; exempt

groups may participate, from work registration

for selected persons

with young children.

80
TABLE B.1 (continued)

Food Stamp Amendments

of 1982 (PL-97-253)

Effective10-82and 1985Farm Bill 1987Homeless Hunger Prevention

ContinuingResolution (PL-99-198) AssistanceAct Act of 1988

of 1984(PL84-473) Effective5-86 (PL-100-97) (PL 100435)

Allotment Indexingto 99%rather Nochange Nochange Incrementalindexingto

than 100% of Thrifty 103 % of Thrifty Food

FoodPlancost.Changed PlanbyFY1991and

backto 100%byPL98- thereafter.

473. Last step in benefit

calculation rounded down

Income Maximum Nonelderly and non- No change No change No change

disabled subject to both

net and gross income

limits

Itemized Next inflation adjustment 20% of earnings. Increased cap on shelter Dependent care

Deductions delayeduntil 10-1-83; Separate cap on deduction for all deduction increasedto

limits on the use of shelter deduction of households certified after $160 per month per

standard utility expense $147, with indexed October 1, 1987. dependent, rather than

allowances increases. Separate per household.

cap on dependent

care of $160, not

indexed

Standard Next inflation adjustment No change No change No change

Deduction delayed until 10-1-83

Benefit Reduction No change No change No change No change

Rate

Accounting Period Migrant workers, elderly Retrospective Exempts from monthly No change

disabled households with budgeting and reporting requirements

no earnings exempt from monthly reporting seasonal farmworkers and

monthly reporting required for households in which all

households with members are homeless.

earnings or work

history except

migrant farmers and

elderly or disabled

with earnings

Eligibility of No change Automatic eligibility No change No change

Public Assistance for pure AFDC or

Households SSI households.

Asset Limits States' option: waive asset $2,000; $3,000 for No change No change

test for pure AFDC households with

households passing gross elderly member(s)

income test. IRA, (includingoneKEOGH accounts count person households}.

asassets Changeddefinition

of countable

resources.

81
TABLE B.1 (continued)

Food Stamp Amendments

of 1982 (PL-97-253)

Effective10-82and 1985Farm Bill 1987Homeless Hunger Prevention

ContinuingResolution (PL-99-198) AssistanceAct Act of 1988

of 1984(PL84-473) Effective5436 (PL-100-97) (PL 100-435)

MinimumBonus Nochange Nochange Nochange Nochange

Other Changes Incentives for error rate Selected changes Outreach efforts for Expanded the definition

reduction, limits student include: new homeless persons and of disabled. Excluded

eligibility, benefits definition of other hard-to-serve groups, advanced EITC

rounded down, job search disabled, minor Simplified application payments as income.

requirements, Puerto changes in treatment process for these groups.

Rico cashout prohibited, of income, tougher Expanded eligibility for

Household unit definition work requirement expedited source. Moved

altered. No initial month provisions, new annual adjustment in

benefit less than $10. SSI employment and income eligibilityguidelines

& SS COLA adjustments training provision, to October 1 of each year

disregarded up to 3 Puerto Rico block from July 1.

months. New definition of grant funds, students

disabled, in JTPA exempt

from categorical

restriction; residents

of publicly operated

mental health

centers may

participate.

82
APPENDIX C

UNWEIGttTED SAMPLE SIZES FOR TIlE CASE RECORD SURVEYS

AND

UNWEIGHTED SAMPLE SIZES FOR THE CPS
APPENDIX C

TABLE C-1

UNWEIGHTED SAMPLE SIZES

FOR THE CASE RECORD SURVEYS

Month/Year Case Record Surveys

September1976 11,038

February1978 14,211

August1980 4,140

August1982 7,224

August1984 6,918

August1986 11,010

August1988 10,695

August1990 10,639

TABLE C-2

UNWEIGHTED SAMPLE SIZES

FOR THE CPS

Eligible All

AnalysisYear Households Households

1976 12,276 68,294

1978 10,122 68,455

1980 11,372 81,451

1982 10,335 73,195

1984 9,719 74,568

1986 9,953 73,843

1988 8,751 70,454

1990 9,348 75,076

85