United States 

Department of 

Agriculture

Economic

Research

Service

Kenneth Hanson and Victor Oliveira

How Economic Conditions 

Affect Participation in 

USDA Nutrition Assistance 

Programs

Economic

Information

Bulletin

Number 100

September 2012
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Recommended citation format for this publication: 

Hanson, Kenneth and Victor Oliveira, How Economic Conditions Affect

Participation in USDA Nutrition Assistance Programs, EIB-100, U.S. 

Department of Agriculture, Economic Research Service, September 2012.

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United States

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A Report from the Economic Research Service

Abstract

This study, based on 1976-2010 data, examines the relationship between U.S. economic 

conditions and participation in the U.S. Department of Agriculture’s five largest nutrition 

assistance programs. It also describes how changes in program policy and other factors 

may have influenced this relationship. The five programs are: Supplemental Nutrition 

Assistance Program (SNAP, formerly the Food Stamp Program), Special Supplemental 

Nutrition Program for Women, Infants, and Children (WIC), National School Lunch 

Program (NSLP), School Breakfast Program (SBP), and Child and Adult Care Food 

Program (CACFP). Although SNAP’s reputation as one of the Nation’s primary countercyclical assistance programs—expanding during economic downturns and contracting 

during periods of economic growth—is well established, there has been little analysis 

of the effect of the economy on the other programs. The results of this study strongly 

suggest that, to varying degrees, economic conditions influence participation in all the 

major nutrition assistance programs, not just in SNAP.

Keywords: Nutrition assistance programs, business cycle, caseloads, participation, 

unemployment rate, Supplemental Nutrition Assistance Program (SNAP), Special 

Supplemental Nutrition Program for Women, Infants, and Children (WIC), National 

School Lunch Program (NSLP), School Breakfast Program (SBP), and Child and Adult 

Care Food Program (CACFP).

Acknowledgments

The authors thank David Smallwood, Constance Newman, and Jessica Todd from 

USDA’s Economic Research Service, staff members from USDA’s Food and Nutrition 

Service, H. Luke Shaefer from the University of Michigan, and one anonymous reviewer 

for helpful comments. Thanks also to ERS editor Courtney Knauth and ERS designer 

Wynnice Pointer-Napper.

How Economic Conditions 

Affect Participation in USDA 

Nutrition Assistance Programs

Economic 

Information 

Bulletin 

Number 100

September 2012

Kenneth Hanson, khanson@ers.usda.gov

Victor Oliveira, victoro@ers.usda.gov
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Contents

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Data and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Supplemental Nutrition Assistance Program (SNAP) . . . . . . . . . . . . . . . 8

SNAP Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Special Supplemental Nutrition Program for Women, Infants, 

 and Children (WIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

WIC Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

National School Lunch Program (NSLP) . . . . . . . . . . . . . . . . . . . . . . . . 21

NSLP Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

School Breakfast Program (SBP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

SBP Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Child and Adult Care Food Program (CACFP) . . . . . . . . . . . . . . . . . . . . 31

CACFP Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Appendix A—Supplemental Nutrition Assistance Program (SNAP) 

Participation Influenced by Economy and Policy: 

 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Appendix B—Tables on Estimated Annual Average Change in 

Nutrition Assistance Program Participation . . . . . . . . . . . . . . . . . . . 44

Appendix C— Child and Adult Care Food Program (CACFP) 

Total Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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Summary

What Is the Issue?

The U.S. Department of Agriculture (USDA) administers 15 domestic 

nutrition assistance programs. The five largest programs—Supplemental 

Nutrition Assistance Program (SNAP, formerly the Food Stamp Program), 

Special Supplemental Nutrition Program for Women, Infants, and Children 

(WIC), National School Lunch Program (NSLP), School Breakfast Program 

(SBP), and Child and Adult Care Food Program (CACFP)—accounted for 

96 percent of USDA’s expenditures for nutrition assistance in fiscal 2010. 

These programs form a nutritional safety net for millions of children and lowincome adults, a role that is especially important when the economy falters 

and many Americans lose jobs and income.

SNAP’s reputation as one of the Nation’s primary countercyclical assistance 

programs—expanding during economic downturns and contracting during 

periods of economic growth—is well established. However, there has been 

little analysis of the effect of the economy on the other programs. This is 

the first study to investigate the relationship between economic conditions 

and participation at the national level across USDA’s five largest nutrition 

assistance programs. The report also provides a detailed description of how 

changes in program policies and other factors such as demographics affected 

participation, augmenting or offsetting business cycle effects.

What Did the Study Find?

The results of this study suggest that, to varying degrees, economic conditions, as measured by the unemployment rate, influence participation in all 

the major nutrition assistance programs, not just in SNAP. 

Key findings include the following:

•	The increase in SNAP participation during the 2008-10 period of economic

decline (which included the recent recession) was consistent with the 

increase during previous periods of economic decline, at 2 to 3 million 

participants per 1-percentage-point increase in the unemployment rate. 

•	Policy changes pertaining to eligibility rules, benefit levels, outreach,

and the application-certification process tended to augment the increase 

in SNAP participation due to economic conditions in each period of 

economic decline. 

•	Before being fully funded in the late 1990s, WIC participation was

rationed by the program’s budgetary limits and expanded as the budget 

grew. The introduction of infant formula rebates in the late 1980s lowered 

the cost of the WIC food package, enabling more people to participate 

within the program’s budget and fueling an increase in the annual average 

growth in participation. 

•	After reaching full funding in the late 1990s, WIC caseloads became

more sensitive to economic conditions, increasing (decreasing) by nearly 

2.5 percent (200,000 participants) per 1-percentage-point increase 

(decrease) in the unemployment rate. The number of births also had a 
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strong influence on the number of participants; for instance, during the 

recession of 2008-09, the low number of births tended to counter the 

growth in participation prompted by economic conditions. 

•	The percentage of participants receiving free and reduced-price meals in

the child nutrition programs (NSLP, SBP, and CACFP) appears related to 

economic conditions, rising with the unemployment rate during periods 

of economic decline. 

•	Total participation in the child nutrition programs has steadily increased

during periods of both economic growth and decline. These programs 

serve both low- and high-income children. 

•	NSLP participation appears to be linked to school enrollment, while

availability of the program in schools has been a key to the growth of 

SBP participation.

How Was the Study Conducted?

The study used national-level administrative data on program participation collected by USDA’s Food and Nutrition Service (FNS) and data on 

unemployment rates published by the Bureau of Labor Statistics. The study 

period—fiscal year 1976 to fiscal year 2010—encompassed four complete 

business cycles, each consisting of a period of economic growth characterized 

by a falling unemployment rate and a period of economic decline characterized by a rising unemployment rate. For each period of growth and decline, 

the authors examined the relationship between the fluctuation in program 

participation and the unemployment rate. They also examined various 

publications and regulations to determine how program policy and other 

factors (such as demographics) may have influenced the relationship between 

program participation and the unemployment rate. 
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Introduction

The U.S. Department of Agriculture (USDA) administers 15 domestic nutrition assistance programs that form a nutrition safety net for millions of 

children and low-income adults, a role that is especially important when 

the economy falters and many Americans lose jobs and income. As meanstested programs, the size of the eligible population is intrinsically linked 

to the economy. That is, the number of those who are eligible rises during 

recessionary periods when the number of unemployed and poor people 

increases and falls during periods of economic growth as conditions improve. 

The extent to which participation in these programs responds to changing 

economic conditions affects not only the lives of millions of Americans, but 

has Federal budgetary implications as well. 

This is the first study to investigate the relationship between economic conditions and participation at the national level across USDA’s five largest nutrition assistance programs. The report also provides a detailed description of 

how changes in program policy and other factors—e.g., demographics—may 

have affected participation and thus influenced the relationship between 

program participation and economic conditions. The study period, from fiscal 

year (FY) 1976 to FY 2010, covers much of each program’s history, while 

encompassing the growth and decline phases of four business cycles.1 By 

including the recession of 2008-09 (often called the Great Recession), we 

are able to compare how the change in participation relative to the change in 

economic conditions during that period compares with participation changes 

during previous economic downturns. 

The five programs examined in this report—Supplemental Nutrition 

Assistance Program (SNAP, formerly the Food Stamp Program); Special 

Supplemental Nutrition Program for Women, Infants, and Children (WIC); 

National School Lunch Program (NSLP); School Breakfast Program 

(SBP); and Child and Adult Care Food Program (CACFP)—accounted for 

96 percent of USDA’s expenditures for nutrition assistance in fiscal 2010 

(Oliveira, 2011). The programs vary by target population, eligibility requirements, form of benefit provided, funding mechanism, age of recipients, and 

size (i.e., in terms of both number of participants and expenditures) (table 1).

As illustrated in figure 1, the relationship between program caseloads and 

changing economic conditions—as measured by the unemployment rate—

varies across the programs. SNAP caseloads clearly follow the unemployment rate, supporting SNAP’s reputation as one of the Nation’s primary 

countercyclical assistance programs, expanding during economic downturns 

and contracting during periods of economic growth. At first glance, there is 

no apparent relationship between program caseloads and economic conditions for the other programs. For example, SNAP is the only program whose 

participation appears to spike during the recent economic downturn after 

2008. The seeming nonresponse of these other programs raised the primary 

question motivating this study: Do changes in economic conditions affect 

only participation in SNAP or also participation in the other major nutrition 

assistance programs? 

1As discussed in the data and methodology section, dates for the growth 

and decline phases of the business 

cycles in this report differ somewhat 

from the dates for the turning points 

in the business cycles specified by the 

National Bureau of Economic Research 

(NBER).
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Table 1

Selected characteristics of the major USDA nutrition assistance programs

Program

Year 

permanently 

authorized 

Target 

population

Income

eligibility limit

Form of benefit 

provided

Funding

mechanism

Average 

participation in 

FY 2010 

Total USDA 

expenditures in 

FY 2010

SNAP 1964 Households

130 percent 

of poverty 

Electronic 

benefits to 

purchase food

Entitlement 

program

40.3 million participants 

per month $68.3 billion

WIC 1974

Women, infants, 

and children

185 percent 

of poverty

Supplemental 

foods

Discretionary 

program

9.2 million

 participants per 

month $6.7 billion

NSLP 1946

Primary and 

secondary 

students 

130 percent of 

poverty for free 

meals and 185 

percent of poverty 

for reduced-price 

meals1 Lunch

Entitlement 

program

31.7 million 

children per day $10.9 billion

SBP 1975

Primary and 

secondary 

students 

130 percent of 

poverty for free 

meals and 185 

percent of poverty 

for reduced-price 

meals1 Breakfast

Entitlement 

program

11.7 million 

children per day $2.9 billion

CACFP 1978

Children 

and adults in 

day care No limit 

Breakfast, lunch, 

dinner, and 

snacks

Entitlement 

program

3.4 million 

persons per day $2.6 billion

Note: SNAP=Supplemental Nutrition Assistance Program; WIC=Special Supplemental Nutrition Program for Women, Infants, and Children;

NSLP=National School Lunch Program; SBP=School Breakfast Program; CACFP=Child and Adult Care Food Program.

1However, all children attending schools that offer NSLP or SBP may participate in these programs. If the household’s income exceeds the 

maximum limit for free and reduced-price meals, the student can purchase a “full price” meal (i.e., a paid-for meal).

Source: USDA Economic Research Service calculations based on USDA Food and Nutrition Service data. Participation and expenditure 

data are from the USDA Food and Nutrition Service program data Webpage as of April 30, 2012.

Source: USDA Food and Nutrition Service data and U.S. Department of Labor, Bureau of Labor Statistics data.

Figure 1

Nutrition assistance program participation and unemployment rate, fiscal years 1976-2010

Millions of participants

1976 78 80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10

0

5

10

15

20

25

30

35

40

45

0

2

4

6

8

10

12

Supplemental Nutrition Assistance Program

National School Lunch Program

School Breakfast Program

Child and Adult Care Food Program

Unemployment rate

Special Supplemental Nutrition Program for Women, Infants, and Children

Unemployment rate, percent
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A number of studies have documented the relationship between economic 

conditions and participation in SNAP (e.g., Klerman and Danielson, 2011). 

These studies found a positive effect of the unemployment rate on SNAP caseloads, while also taking into account the impact of policies and other factors 

that were in effect during the study periods (appendix A provides a brief review 

of these studies). Each study focused on specific policies that covered relatively 

short periods, while this report compares the relationship of SNAP participation with the unemployment rate over four business cycles (eight periods of 

economic growth and decline) that occurred during 1976 to 2010. 

There has been little to no analysis of the relationship between participation 

and the economy for the other nutrition assistance programs. The few studies 

that have analyzed the effect of the economy on WIC reached contradictory 

conclusions. Bitler et al. (2003), using data from 1992 to 2000, found that 

WIC participation was not strongly correlated with unemployment, while 

Swann (2010) found a positive correlation between unemployment and WIC 

participation for 1983 to 2006. No recent studies have examined the economy’s impact on the child nutrition programs. 

As a descriptive study, this analysis does not quantify the relative effects of 

the economy, program policies, and other factors on program participation. 

Rather, it is an exploratory examination of whether participation in all of 

the major nutrition assistance programs, and not just SNAP, are related to 

economic conditions. 

The study’s major contribution is that it suggests that economic conditions, 

to varying degrees, influence program participation in all the major nutrition assistance programs, not just SNAP. For example, WIC caseloads appear 

to have become more responsive to economic conditions after the program 

became fully funded in the late 1990s. While economic conditions do not 

affect total participation in the child nutrition programs (NSLP, SBP, and 

CACFP), they do appear to affect the proportion of participants receiving 

free or reduced-price meals. Thus, these other programs, like SNAP, are 

countercyclical, with their use by needy families increasing during economic 

downturns. These findings lay the groundwork for future statistical analyses 

of the relationship between program participation and economic conditions 

for the non-SNAP programs. 

The next chapter describes the data and methodology underlying this study. 

This is followed by the descriptive analysis of the relationship between 

program participation and economic conditions and the influence that 

changes in program policy and other factors have had on this relationship. 

Each program is discussed in a separate chapter, allowing readers to focus on 

those programs of interest to them. Although the relationship between SNAP 

participation and economic conditions is well established, it is included as a 

separate chapter for comparison with the other programs.
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Data and Methodology

To examine the relationship between economic conditions and participation 

in the various programs, this report uses national-level administrative data 

on program participation from FY 1976 to FY 2010 from USDA’s Food and 

Nutrition Service (USDA-FNS), the agency responsible for managing the 

programs.2 Program participation for SNAP and WIC refers to the annual 

average number of monthly participants, that is, monthly participation averaged over the 12 months of a fiscal year (October to September).3 Program 

participation for NSLP and SBP refers to average daily participation averaged 

over 9 months of a school year (September through May). For CACFP, the 

annual average participation data represent average daily attendance over the 

fiscal year. The fiscal year and school year notations in this report are omitted 

and referred to as annual data.

The study period from 1976 to 2010 includes four complete business cycles, 

each consisting of a period of economic growth and a period of economic 

decline (fig. 2). For this report, the economic periods were determined by 

one of the Nation’s primary economic indicators, the official unemployment rate published by the U.S. Department of Labor’s Bureau of Labor 

Statistics. Fiscal year annual unemployment rates were calculated as an 

annual average of seasonally adjusted monthly unemployment rates. Periods 

of economic growth were characterized by a falling unemployment rate and 

periods of economic decline by a rising unemployment rate. Holding other 

factors constant, program participation is expected to increase during periods 

of economic decline—reflecting increased need and eligibility for nutrition assistance—and decrease during periods of economic growth (see box, 

“Unemployment Rate and Poverty Rate Over the Business Cycle,” p. 5). 

The years in which each period of economic growth and decline started and 

ended were specified by whether the year-to-year change in the unemployment rate was negative or positive. The dates for the periods of economic 

growth and decline are listed in table 2, along with the annual average 

percentage-point change in the unemployment rate. The periods of economic 

decline capture each of the recessions that occurred over the years of the 

analysis (fig. 2).4 However, the starting and ending dates for the periods of 

economic decline often extend beyond the official dates of the recession. That 

is, the unemployment rate often started to rise before the recession’s starting 

date and continued to rise—for a year or more—after the recession’s ending 

date. Unemployment rates often do not decline until after a recession has officially ended, in part because businesses do not begin to hire until there is a 

clear indication that the economy is improving. Businesses in some industries 

are able to increase production without hiring more workers during the initial 

phase of recovery by increasing production per unit of labor when capacity 

utilization is low (Schreft et al., 2005). 

To examine the relationship between program participation and economic 

conditions across the various periods of economic growth and decline (business cycles), the annual average change in participation—expressed both as 

number of participants and as percentage of participants—was calculated 

for each period. The annual average change was calculated for each period 

by first calculating the year-to-year difference (and percentage change) in 

2The use of annual, national-level 

data on program participation provides 

a common framework for the analysis 

of programs with different lengths of 

operation (e.g., the school programs 

operate on a 9-month school year). The 

use of monthly, State-level data would 

allow for a more precise quantitative 

estimation of the relationship between 

economic conditions and program 

participation for some programs. For 

our exploratory analysis, however, 

the averaging of State monthly data 

on participation and unemployment 

into annual national measures allows 

for multiyear trends over the business cycle to be more transparent and 

illustrative of the basic relationship 

between program participation and 

economic conditions.

3Throughout the report, the terms 

“participation” and “caseloads” are 

used interchangeably in reference to 

the annual average number of program 

participants (persons).

4The Business Cycle Dating 

Committee of the NBER determines 

the dates of recessions, which they 

define as a significant decline in 

economic activity lasting more than 

a few months and normally visible in 

real Gross Domestic Product (GDP), 

real income, employment, industrial 

production, and real sales. The NBER 

dates of recessions are: November 

1973 to March 1975; January 1980 to 

November 1982 (which includes the 

two recession periods of January to 

July 1980 and July 1981 to November 

1982); July 1990 to March 1991; 

March 2001 to November 2001; and 

December 2007 to June 2009.
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the annual average number of participants, and then taking the average of 

these year-to-year differences (and percentage changes) over the years in 

each of the periods. Since the number of years in each period is unequal, 

the change in participation and the unemployment rate during each period 

are calculated as annual average changes over the period, which makes for 

better comparability across periods. For the child nutrition programs (NSLP, 

SBP, and CACFP), the annual average percentage change in the percentage 

of participants receiving free and reduced-price meals was also calculated. 

Because the number of participants receiving free and reduced-price meals 

increased each year with the growth in school enrollment, the percentage of 

participants receiving free and reduced-price meals is a better indicator for 

measuring the influence of economic conditions.

To keep the analysis as straightforward as possible, participation figures cited 

in this report have not been normalized by population and reflect the actual 

number of participants. Population growth was generally steady over the 

A number of indicators provide information about the overall state of the 

economy, such as Gross Domestic Product (GDP), real income, wholesale-retail 

sales, industrial production, employment, and the unemployment rate. Unlike 

many of these measures, the unemployment rate has a more direct relationship 

with the poverty rate, which is a measure of household hardship and economic 

well-being and underlies the need for nutrition assistance. Figure 2 shows the 

relationship between the unemployment rate and poverty rate over the periods of 

economic growth and decline between 1976 and 2010. The year-to-year change in 

the poverty rate and unemployment rate has a correlation coefficient of 0.76 over 

these years, suggesting that a change in the unemployment rate is a good proxy for 

a change in the poverty rate. This study used the unemployment rate to represent 

economic conditions. Unemployment is a well-recognized indicator of the state 

of the economy, published monthly with only a 1-month lag and used by the 

Federal Government as a forecast variable in budgetary projections of nutrition 

assistance program caseloads. While the Bureau of Labor Statistics publishes 

five alternative unemployment rates in addition to the “official” one, for national 

annual data the various measures of unemployment are highly correlated, and so 

the official unemployment rate is used in our analysis. We use the unemployment 

rate rather than the number of unemployed because of greater public familiarity 

with the rate.

An exception to the high correlation between the unemployment rate and the 

poverty rate occurred during the 2004-07 period of economic growth. While the 

unemployment rate fell throughout this period, the poverty rate rose in 2004, 

fell slightly during the next 2 years, and then rose again in 2007 for a net change 

of zero over the period. The deviation in the trend between unemployment and 

poverty rates during this period suggests that while the economy was growing and 

the unemployment rate was falling, the economic well-being of many households 

did not improve. Previous research has suggested that labor market conditions for 

less skilled workers, such as real wages and job opportunities, did not improve as 

much or as quickly as they had during past economic recoveries and poverty rates 

remained close to those of the previous period of economic decline (Bivens and 

Irons, 2008; Blank, 2009; Greenstone and Looney, 2011).

Unemployment Rate and Poverty Rate 

Over the Business Cycle
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study period, averaging 1 percent per year while ranging from 0.7 percent to 

1.3 percent (U.S. Bureau of Census, annual population data). The impact of 

population growth on participation (including related issues such as trends in 

births and school enrollment) varied across programs and is discussed, when 

relevant, in the appropriate chapters. 

The size of change in the unemployment rate varied across the different 

periods of growth and decline (table 2). For example, the largest annual 

average percentage-point change in the unemployment rate occurred during 

the 2008-10 period of economic decline, which included the Great Recession, 

at an annual average of 1.74 percentage points per year. Thus, changes in 

program participation are not expected to be equal across the various periods. 

To better compare the relationship between program participation and the 

Note: The bars distinguish periods of growth and decline as defined by fiscal year annual unemployment rates (calculated as an annual average 

of the official monthly unemployment rates published by the U.S. Department of Labor’s Bureau of Labor Statistics). Periods of economic 

growth were characterized by a falling unemployment rate and periods of economic decline by a rising unemployment rate. Shaded areas 

represent National Bureau of Economic Research periods of recession.

Source: USDA Food and Nutrition Service data, U.S. Department of Labor, Bureau of Labor Statistics data, and U.S. Census Bureau data.

Figure 2

Unemployment rate and poverty rate in periods of economic growth and decline, fiscal years 1976-2010

Percent

1976 78 80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10

0

2

4

6

8

10

12

14

16

growth decline growth decline growth decline growth decline

Unemployment rate Poverty rate

Table 2

Periods of economic growth and decline and change in 

unemployment rate

Fiscal years Economic period

Annual average

percentage-point 

change in

unemployment rate

Duration of

period in

fiscal years

1976-1979 growth -0.55 4

1980-1983 decline 1.07 4

1984-1989 growth -0.81 6

1990-1992 decline 0.72 3

1993-2000 growth -0.43 8

2001-2003 decline 0.66 3

2004-2007 growth -0.37 4

2008-2010 decline 1.74 3
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unemployment rate during the 2008-10 period with that of other economic 

periods, the annual average change in program participation during each 

period of growth and decline was divided by the annual average percentage 

point change in the unemployment rate that occurred during the period. This 

normalized the change in participation to a 1-percentage-point change in the 

unemployment rate, improving the comparability of the participation/unemployment relationship across periods.

For all the programs, changes in program policy and other factors have 

affected participation and thus influenced the relationship between program 

participation and the unemployment rate. In general, the direction of the 

effect on participation from these changes is evident, but not the magnitude 

of the effect. In some cases, changes in program policy and other factors 

augment the response of program participation to economic conditions; in 

other cases, they dampen or even negate the effect of changing economic 

conditions. Changes in program policy can occur through legislative changes 

and changes in administrative practices pertaining to such factors as eligibility rules, benefit levels, application-certification process (i.e., accessibility), and outreach. Other factors, such as funding levels (WIC), program 

availability (child nutrition programs), demographics (WIC), and economic 

factors other than the unemployment rate (such as wages for low-skilled 

workers) may also affect program participation. This report describes key 

changes in program policy and other factors and notes whether they would 

have augmented or dampened the effect of changes to the unemployment rate 

on participation. 
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Supplemental Nutrition Assistance 

Program (SNAP)

SNAP—formerly the Food Stamp Program—is the cornerstone of USDA’s 

nutrition assistance programs, accounting for 72 percent of all Federal 

nutrition assistance spending in fiscal 2010 (Oliveira, 2011). By providing 

electronic benefits that can be used like cash for food purchases at most 

grocery stores, SNAP enables participants—half of whom are children—to 

improve their diets by increasing their food-purchasing power. Benefit levels 

depend on household income and size. As a household’s income increases, 

SNAP benefits decrease. Unlike other nutrition assistance programs that 

are targeted toward special population groups, SNAP is available to most 

needy households, subject to certain work and immigration-status requirements. To be eligible for SNAP, the gross monthly income of households 

must be 130 percent or less of the Federal poverty guidelines (households 

with an elderly or disabled member are excluded from the gross income 

test). Net monthly income must be 100 percent or less of Federal poverty 

guidelines, where net income equals gross income minus a standard deduction, a housing expense deduction, earned income deduction, child care 

deduction, and several other smaller deductions. 

As illustrated in figure 3, SNAP caseloads and the unemployment rate generally trend together, with participation increasing during economic downturns 

and decreasing during periods of economic growth. Over the full 1976-2010 

period, the correlation coefficient between year-to-year change in the unemployment rate and year-to-year change in SNAP participation was 0.60; after 

omitting the earlier years from 1976-83 when policy changes had an especially large impact on participation, the correlation coefficient rises to 0.70.5

The relationship between SNAP participation and the unemployment rate has 

been well established in a number of empirical studies (see appendix A for a 

review of this literature). An advantage of these studies is that they estimate 

the impact of economic conditions on program participation while simultaneously estimating the impact of program policy. However, most of the studies 

omitted national policies and relied on variation in State economic conditions 

and implementation of program policy to estimate their models and were only 

able to explain about 50 percent of the change in participation (Klerman and 

Danielson, 2011; Mabli et al., 2009). 

This chapter provides a broad, historical context for assessing how economic 

conditions and program policy have influenced SNAP participation over a 

long period. Specifically, it describes and compares the relationship of SNAP 

participation with the unemployment rate over four business cycles (eight 

periods of economic growth and decline) that occurred during the study 

period of 1976 to 2010 and describes how numerous changes in program 

policy influenced this relationship (fig. 4). Sometimes the change in policy 

augmented the influence of the unemployment rate on participation, while at 

other times the change in policy dampened the influence of the unemployment rate on participation. 

During the first period of analysis in this report, the 1976-79 period of 

economic growth, there was a slight annual average increase in SNAP 

5Population growth does not appear 

to have had a significant influence on 

SNAP participation at the national 

level, so this study does not include 

population as a factor in the analysis. 

Over the study period, average population growth was relatively stable, 1 

percent per year, with a minimum 

of 0.7 percent and a maximum of 

1.3 percent per year. If population 

growth had a significant effect on 

SNAP participation, there should be 

an upward trend around which the 

cyclical pattern caused by economic 

conditions occurred. Such an upward 

trend does not appear to be significant. Participation has been cyclical 

around a fairly flat midpoint of 20 to 

25 million persons. The 1994 peak in 

caseloads was not exceeded until 2008, 

while the 2001 low was the lowest 

since 1977. The rise in participation 

during the 2000s was related more 

to economic conditions and program 

policy than population growth.
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participation, a result contrary to expectations (fig. 5 and appendix B, table 1). 

SNAP participation increased in 1976, a continuation of the increase during 

the economic decline of 1974-75 (prior to the period of analysis in this study). 

This could have resulted from a continued nationwide expansion of program 

participation once all State and localities started making SNAP available in 

1974 and from a possible lag in the economic gains to low-income households 

during the initial period of an economic recovery (see box, “Asymmetrical 

Lags in SNAP Participation,” p. 11). SNAP participation finally decreased 

in 1977 and 1978 along with the unemployment rate, as would be expected. 

However, SNAP participation increased once again in 1979 as a result of 

the Food Stamp Act of 1977 (P.L. 95-113) that made major changes to the 

Source: USDA Food and Nutrition Service data and U.S. Department of Labor, Bureau of Labor Statistics data.

Figure 3

Supplemental Nutrition Assistance Program (SNAP) participation and unemployment rate, fiscal years 1976-2010 

Millions of SNAP participants

growth decline growth decline growth decline growth decline

1976 78 80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10

0

5

10

15

20

25

30

35

40

45

0

2

4

6

8

10

12

Unemployment rate, percent

SNAP participation Unemployment rate

growth decline growth decline growth decline growth decline

Source: Based on USDA Food and Nutrition Service information.

Figure 4

Policies and legislative acts impacting Supplemental Nutrition Assistance Program (SNAP) participation, 

fiscal years 1976-2010 

Millions of SNAP participants

1976 78 80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10

0

5

10

15

20

25

30

35

40

45

0

2

4

6

8

10

12

Unemployment rate, percent

SNAP participation Unemployment rate

Food Stamp Act

of 1977

Omnibus Budget Reconcilation

Acts of 1981 and 1982 Hunger Prevention

Act of 1988

1993 Omnibus Budget

Reconciliation Act Farm Security and Rural

Investment Act of 2002

Food Security Act

of 1985

Medicaid expansion

Welfare Reform Act

of 1996 

Expansion of

outreach, access, and

categorical eligibility

Stimulus Act

of 2009
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program (Wertheimer and Fletcher, 1985; Dynaski et al., 1991). A key 

change was elimination of the purchase requirement (U.S. Department of 

Agriculture, 2011a). Prior to the Act, program participants were required 

to purchase food stamps at a discounted price that depended on household 

income.6 The purchase requirement limited participation among the very 

poor because people with little available cash found it difficult to purchase the 

food stamps (Ohls and Beebout, 1993). The Act was enacted near the end of 

1977, and States were given a year to implement the revisions, so the impact 

of the 1977 legislation on program participation would not have been felt until 

1979. An increase in the poverty rate from 1978 to 1979, reflecting increased 

economic need, would also have been associated with an increase in participation (Wertheimer and Fletcher, 1985).

Over the 1980-83 period of economic decline, SNAP participation increased 

by an average 5.6 percent (1.0 million participants) per year (fig. 5), but the 

direction of change varied during the period. SNAP participation increased 

by an average 12.9 percent (2.4 million participants) per year during the first 

2 years of this period (appendix B, table 1), a likely result of the economic 

decline and a continued response to the 1977 legislation. During the last 

2 years of the period, however, SNAP participation fell by an average 1.8 

percent (402,000 participants) per year, even as the unemployment rate 

continued to rise. The Omnibus Budget Reconciliation Acts of 1981 and 1982 

(P.L. 97-35 and 97-253) contributed to this contrary result (Wertheimer and 

Fletcher, 1985; Dynaski et al., 1991). The Acts tightened eligibility rules, 

thereby reducing the number of persons eligible to participate, and reduced 

benefits, lowering the incentive to participate among the eligible population 

(see box, “SNAP Take-Up Rates,” p. 12).7

As expected, participation fell during the 1984-89 period of economic 

growth. However the reduction was relatively small: an average 2.3 percent 

(470,000 participants) per year (fig. 5). The Food Security Act of 1985 

(P.L. 99-198) and the Hunger Prevention Act of 1988 (P.L 100-435) eased 

6Recipients paid an amount 

commensurate with the normal food 

expenditures for their household size 

and income and received that amount 

plus an additional amount of food 

stamps to “more nearly obtain” a 

low-cost, nutritionally adequate diet 

for that household size (Food Stamp 

Act of 1964, P.L 88-525; Berry, 1984). 

The bonus amount ranged from 100 

percent to 20 percent of the total value 

of food stamps, depending on household income. In setting the purchase 

price and bonus amount, there was 

an attempt to balance concern for 

trafficking excess benefits and for 

providing an incentive to purchase an 

adequate diet.

7

Among other changes, the 1981 and 

1982 legislation set a gross income 

eligibility standard at 130 percent of 

poverty for households without elderly 

or disabled members in addition to 

the net income test at 100 percent of 

poverty, lowered the earned income 

deduction from 20 to 18 percent, and 

required States to implement periodic reporting (U.S. Department of 

Agriculture, 2011a).

Years shown are fiscal years.

Source: USDA Economic Research Service, based on USDA Food and Nutrition Service data.

Figure 5

Supplemental Nutrition Assistance Program (SNAP) participation, 

annual average change during periods of economic growth (blue) 

and decline (red) 

Millions of SNAP participants

-2

-1

0

1

2

3

4

5

08-10

decline

04-07

growth

01-03

decline

93-2000

growth

90-92

decline

84-89

growth

80-83

decline

1976-79

growth
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eligibility rules, made several changes to administrative rules that opened up 

program access, and provided greater incentives to participate by increasing 

the benefit amount to most recipients. These policy changes diminished the 

effect that the improved economic conditions would normally have had on 

program participation (Dynaski et al., 1991).8

The 1990-92 period of economic decline saw an average increase of 10.6 

percent (2.2 million participants) per year in participation (fig. 5). This 

large increase was due to the economic decline as well as to changes in 

program policy that increased the take-up rate. For instance, expansion in 

the Medicaid program increased the SNAP take-up rate because there was a 

greater effort to inform Medicaid applicants about SNAP and to encourage 

them to apply for benefits (McConnell, 1991). In addition, the Hunger 

Prevention Act of 1988 would have continued to have an effect on program 

participation during this period (Dynaski et al., 1991). 

8The 1985 legislation made households in which all members receive 

Aid to Families with Dependent 

Children (AFDC) or Supplemental 

Security Income (SSI) categorically 

eligible for SNAP; raised the earned 

income deduction from 18 to 20 

percent; raised the shelter deduction 

limit and dependent-care deduction; 

raised the asset limit from $1,500 to 

$2,000; and authorized simplified 

application for households in which 

at least one member receives AFDC, 

SSI, or Medicaid. Policy changes in 

the 1988 legislation include raising 

the maximum benefit amount above 

100 percent of the Thrifty Food Plan 

cost; providing greater State flexibility in design of the application 

form to make it easier to use; requiring 

States to be clearer about necessary 

reporting responsibility and documentation; requiring States to provide 

prompt and accurate certification; and 

improving the method for claiming 

recurring medical expenses for the 

medical deduction (U.S. Department of 

Agriculture, 2011a).

SNAP caseloads over the business cycles appear to exhibit asymmetrical lags in 

response to a change in the unemployment rate. During each of the four economic 

declines that occurred during the 1976-2010 study period, SNAP participation 

rose quickly and in step with the unemployment rate. Essentially there was no 

lag in the participation response to the rising unemployment rate, and in each 

period the rates of increase were about the same. During three of the four periods 

of economic growth, however, reductions in SNAP participation lagged behind 

decreases in the unemployment rate. That is, as the unemployment rate started 

to fall during the early phase of the 1976-79, 1993-2000, and 2004-07 periods of 

economic growth, SNAP participation continued to increase for 1 or more years. 

The one exception occurred during the 1984-89 period of economic growth and 

was likely due to the Omnibus Budget Reconciliation Acts of 1981 and 1982, 

which had already started a reduction in participation prior to the growth period. 

One explanation for a lagged response of SNAP participation to a reduction in the 

unemployment rate during the early stage of an economic recovery is that labor 

market outcomes (such as unemployment) for less skilled workers vary more 

over the business cycle than do those of more skilled workers (Hoynes, 2000; 

Blank, 2009). The improvement of economic conditions during the early stage of 

recovery, when the unemployment rate finally starts to fall, takes longer to be felt 

by low-income workers in low-skilled jobs who are more likely to participate in 

SNAP. The phenomena of jobless recoveries could also contribute to asymmetry 

in the business cycle (Schreft et al., 2005), particularly if the low-skilled jobs are 

slower to recover than high-skilled jobs. 

The empirical studies of SNAP participation (see appendix A) account for a 

lagged response in participation to a change in the unemployment rate by lagging 

the unemployment rate for 1 or more years in the estimated model, along with 

the current unemployment rate (e.g., Klerman and Danielson, 2011). However, 

this treatment of the lagged response is symmetrical over the business cycle 

and does not focus on the slow reduction in participation during the early stage 

of an economic recovery. There is some literature that addresses the issue of 

asymmetry of the unemployment rate over the business cycle that could be used 

to assess asymmetry of SNAP participation over the cycle (e.g., Neftci, 1984; 

Sichel, 1993). 

Asymmetrical Lags in SNAP Participation
12

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Although SNAP participation decreased by an average 4.6 percent (1.0 million 

participants) per year over the 1993-2000 period of economic growth (fig. 5), 

the change in caseload varied markedly over this period. During the first 2 years 

of economic growth (1993 and 1994), participation increased by an average 4.0 

percent (1.0 million participants) per year (appendix B, table 1). The increased 

participation was probably, in part, the result of the 1993 Omnibus Budget 

Reconciliation Act (P.L. 103-66) that eased eligibility rules and increased the 

take-up rate among those eligible.9,10 A lag in the economic gains to low-income 

9Chapter 3 of the 1993 Act (Mickey 

Leland Childhood Hunger Relief Act) 

made various changes to program 

policy that would have eased eligibility 

rules and increased the take-up rate, 

including an incremental increase to 

the shelter deduction cap; excluding 

earned income tax credit as resources 

for 12 months from receipt; disregarding child support payments as 

income to the payer; increasing the 

degree to which vehicles are disregarded as assets; revising the definition of a food stamp household; 

and increasing the degree to which 

dependent care expense deductions 

can be claimed (U.S. Department of 

Agriculture, 2011a).

10The empirical studies for this 

period discussed in appendix A did not 

include this national policy change in 

the analysis of SNAP participation.

The number of participants in SNAP is affected by changes in the number of 

persons who are eligible to participate as well as the percentage of eligible 

persons who choose to participate, that is, the take-up rate (also known as the 

participation rate). Changes in program policy may affect the take-up rate. For 

example, expanded outreach and simplification of the application process pull 

more eligible people into SNAP, while legislation that increases (decreases) 

benefit levels may provide an incentive for more (or disincentive for fewer) eligible 

people to apply to the program. Economic conditions may also affect take-up 

rates by influencing eligible persons’ decisions on whether to participate in the 

program. The figure illustrates the relationship between SNAP caseloads and two 

types of take-up rates over the business cycle.1 The take-up rate for persons is the 

ratio of participants to eligible persons. The take-up rate for benefits compares (as 

a percent) the actual benefits received by participants with the benefits that would 

be issued if all eligible persons participated. In general, both measures of take-up 

rates (persons and benefits) follow the trend in total participation (i.e., caseloads). 

This suggests that changes in caseloads during periods of economic decline and 

growth are not solely due to changes in the number of eligible persons, but are 

also driven by a change in the take-up rate. 

1The take-up rates were estimated using household survey data and program data on 

participation. There are breaks in the data series for 1994, 1999, and 2002 due to revised 

methodologies for determining SNAP eligibility (U.S. Department of Agriculture, 2011b, 

table 2 and appendix D).

SNAP Take-Up Rates

Source: USDA Food and Nutrition Service data. Years shown are fiscal years.

Trends in Supplemental Nutrition Assistance Program (SNAP) 

take-up rates and participation

Take-up rates, percent

growth decline growth decline growth decline growth

Millions of SNAP participants

Percent take-up rate, benefits

Percent take-up rate, persons Number of SNAP participants

1976 80 84 88 92 96 2000 04 08

0

10

20

30

40

50

60

70

80

90

100

0

5

10

15

20

25

30

35

40

decline
13

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households during the initial period of an economic recovery could have also 

contributed to the increase in participation (see box, “Asymmetrical Lags in 

SNAP Participation,” p. 11). 

Participation finally started to fall in 1995, and the decrease accelerated in 

1997 through 2000 following welfare reform and greater State use of short 

certification periods and frequent recertification (e.g., every 3 months). 

The Personal Responsibility and Work Opportunity Reconciliation Act of 

1996 (P.L. 104-193, also known as welfare reform), made extensive changes 

to SNAP that tightened eligibility rules and reduced benefits—changes 

expected to reduce participation.11 Welfare reform also made changes to other 

programs assisting low-income households that discouraged SNAP-eligible 

households from participating in the program, as reflected in the reduction 

of the SNAP take-up rate (U.S. Government Accountability Office, 1999; 

Zedlewski and Gruber, 2001; and U.S. Department of Agriculture, 2001).12

While participation fell an average 3.6 percent (1.0 million participants) per 

year during 1995 to 1996, it fell an average 9.4 percent (2.1 million participants) per year from 1997 to 2000 (appendix B, table 1). Welfare reform 

augmented the decline in participation that was occurring as a result of 

economic growth, as reflected in a greater per year reduction in participation during 1997 to 2000, compared with 1995 to 1996. A number of studies 

(discussed in appendix A) substantiate the impact of welfare reform on SNAP 

participation, both the legislated changes to SNAP and the cross-program 

effects of changes in other programs (Currie and Grogger, 2001; Kornfeld, 

2002; Kabbani and Wilde, 2003; and Klerman and Danielson, 2011).

The 2001-03 period of economic decline saw participation increase by an 

average of 7.4 percent (1.4 million participants) per year (fig. 5). Changes to 

policy and administrative practices boosted the increase in participation that 

was due to an increase in the unemployment rate. During this time, there was 

particular concern about the low take-up rates among eligible families with 

earnings (McKernan and Ratcliffe, 2003; U.S. Government Accountability 

Office, 2004). A number of efforts were made to turn the falling take-up rate 

around. Program outreach was expanded, simplified reporting for households with earnings was introduced, transitional benefits for TANF leavers 

were started, less restrictive State TANF rules for treating a vehicle as an 

asset could be used instead of SNAP vehicle and asset rules, and expanded 

categorical eligibility was started (U.S. Government Accountability Office, 

2002; Trippe et al., 2004; Zedlewski et al., 2004 and 2005).13 In response to 

the changes in policy, the take-up rate started to rise in 2002, adding to the 

increase in participation resulting from the economic decline (see, Ratcliff, et 

al., 2008; Mabli, et al., 2009; and Klerman and Danielson, 2011). 

Although 2004-07 was a period of economic growth, SNAP participation 

increased—by an average 5.6 percent (1.3 million participants) per year 

(fig. 5). Several factors underlie this seemingly contrary result (Ratcliffe, 

2008; Mabli et al., 2009; Klerman and Danielson, 2011). First, the take-up 

rate for eligible households rose during this period, likely a response to 

continued outreach efforts and adoption of other administrative practices 

that made enrolling and staying in the program easier, such as streamlining 

the application process, simplifying the reporting of changes to income 

while enrolled in the program, and instituting longer certification periods. 

Second, more States adopted options for using categorical eligibility that 

11Welfare reform eliminated 

eligibility of most legal immigrants, 

placed time limits on SNAP receipt for 

able-bodied adults without dependents 

(ABAWDs) who are not working, and 

reduced maximum benefit amount to 

100 percent of the Thrifty Food Plan 

cost. Subsequent budget legislation in 

1997 and 1998 restored eligibility to 

some legal immigrants and allowed 

States to exempt up to 15 percent 

of ABAWDs (U.S. Department of 

Agriculture, 2011a).

12Welfare reform replaced the 

Nation’s welfare program for lowincome families (Aid to Families 

with Dependent Children, AFDC) 

with the Temporary Assistance for 

Needy Families (TANF) program. 

Among other changes, the act required 

States to have a minimum percentage 

of welfare households working or 

participating in work-related activities. 

To meet these requirements, welfare 

recipients and new applicants were 

provided incentives to move into the 

workforce and off the welfare program; 

consequently caseloads fell dramatically. Even if the households leaving 

welfare remained eligible for SNAP, 

many did not remain on or apply for 

SNAP benefits.

13The Agriculture Appropriations 

Act of 2001 (P.L. 106-387) expanded 

outreach and allowed use of TANF 

vehicle limits. The options of simplified reporting, transitional benefits, and 

expanded categorical eligibility were 

allowed through USDA-FNS regulations. Households are categorically 

eligible for SNAP when they participate (receive cash or noncash benefits) 

in TANF or receive General Assistance 

(GA) or Supplemental Security Income 

(SSI), without having to meet the 

SNAP asset limits or the gross and net 

income eligibility standards. However, 

SNAP benefits are still calculated on 

the basis of household income (U.S. 

Department of Agriculture, 2010a).
14

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likely increased participation. These program changes occurred through the 

Agriculture Appropriations Act of 2001, USDA-FNS regulations, and the 

Farm Security and Rural Investment Act of 2002 (P.L. 107-171, 2002 Farm 

Bill) that also restored eligibility for all legal immigrant children. Third, 

labor market conditions for less skilled workers, such as real wages and job 

opportunities, did not improve as much or as quickly as they had during 

past economic recoveries, and poverty rates remained close to those of the 

previous period of economic decline (Bivens and Irons, 2008; Blank, 2009; 

Greenstone and Looney, 2011). Consequently, economic growth as measured 

by a decrease in the unemployment rate did not alleviate the need for nutrition assistance by low-income households.14 And fourth, a series of hurricanes in the fall of 2005, including Hurricane Katrina, devastated areas along 

the Gulf Coast, resulting in a large but mostly temporary increase in participation (Hanson and Oliveira, 2007).

The 2008-10 period of economic decline saw SNAP participation increase by 

an average 15.4 percent (4.7 million participants) per year (fig. 5). The large 

increase in participation can be attributable to the economic decline, while 

the continued use of State policy options and enactment of the American 

Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) that took effect 

in April 2009 (USDA, 2010a) could have also contributed to the increase. 

ARRA, also known as the Stimulus Act, raised the maximum SNAP benefit 

amount by 13.6 percent, which likely increased the take-up rate among 

eligible persons (Nord and Prell, 2011). ARRA also suspended time-limited 

benefits for able-bodied adults without dependents (ABAWDs) through fiscal 

2010, thereby expanding SNAP eligibility. 

After normalizing to account for the large change in the unemployment rate that occurred during 2008-10, the authors found that SNAP 

participation increased by an annual average 2.7 million participants per 

1-percentage-point increase in the unemployment rate (appendix B, table 

6). This was in the range of 2 to 3 million participants per 1-percentagepoint increase in the unemployment rate that occurred during the previous 

two periods of economic decline and during the first half of the 1980-83 

period of economic decline. In all these periods, changes in program policy 

augmented the increase in participation that would have occurred during an 

economic decline. During the last 2 years of the 1980-83 period, changes in 

program policy countered the effects of the economic decline and led to a 

reduction in participation.15

Only during the 1993-2000 period of economic growth was the annual 

average decrease of 2.4 million participants per 1-percentage-point decline 

in the unemployment rate within the 2 to 3 million range of decreases that 

occurred during the periods of economic decline. Changes in program policy 

would have augmented the decrease in participation during this period of 

economic growth. During the other periods of growth, the change in participation per 1-percentage-point decrease in the unemployment rate was either 

small or it increased due to changes in program policy and other factors that 

tended to favor participation, countering the tendency for participation to fall 

with the unemployment rate. 

14The empirical studies on SNAP 

participation for the 2004-07 period 

(appendix A) did not explicitly account 

for these labor market conditions in 

their analysis. They focused on unemployment rates (current and lagged), 

program policy, and State minimum 

wages. The lagged unemployment rates 

could have been a proxy for the poor 

labor market conditions that persisted 

even though the current unemployment 

rate was falling. 

15The 2-to-3 million change in 

participation per 1-percentage-point 

change in the unemployment rate is 

larger than the estimated impacts 

found in some of the studies reviewed 

in appendix A. In part, the difference can be attributed to the change 

in participation due to changes in 

program policy that were accounted 

for in the empirical studies and by the 

fact that the empirical studies only 

account for about half of the change in 

participation.
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SNAP Summary

The relationship between change in the unemployment rate and SNAP participation was consistent with expectations of their rising or falling together 

during six of the eight periods of economic growth and decline in this study 

(fig. 5). In all four periods of economic decline, participation increased with 

the unemployment rate as expected, and the magnitude of increase was 

augmented by changes in program policy in all four periods. After normalizing for the change in the unemployment rate, the authors found the increase 

in SNAP participation during the 2008-10 period of economic decline to be 

consistent with the increase during previous periods of economic decline.

In two of the four periods of economic growth (1984-89 and 1993-2000), 

participation decreased, but in the other two it increased, contrary to expectations. However, these contrary results for the 1976-79 and 2004-07 growth 

periods were likely due to changes in program policy that increased participation and to other factors that led to an increase in the poverty rate, such as 

stagnant real earnings and job opportunities for low-skilled workers, which 

would have contributed to an increase in participation. 
16

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Special Supplemental Nutrition Program 

for Women, Infants, and Children (WIC)

Initiated as a 2-year pilot program in 1972, WIC officially started in fiscal 

year 1974. The program’s mission is to safeguard the health of low-income 

pregnant, breastfeeding, and postpartum women, infants, and children up to 

age 5 who are at nutritional risk by providing supplemental foods, nutrition 

education, breastfeeding promotion and support, and health care referrals. To 

be eligible for WIC, applicants must meet income guidelines, a State residency 

requirement, and be individually determined to be at “nutrition risk” by a 

health professional. To be eligible on the basis of income, applicants’ gross 

income (before taxes) must fall at or below 185 percent of the U.S. Poverty 

Income Guidelines. A person who participates or has family members who 

participate in certain other benefit programs, such as SNAP, Medicaid, or 

TANF, automatically meets the income eligibility requirement. The amount 

of food provided to WIC participants does not vary with household income.

For much of the WIC program’s history, WIC caseloads were unresponsive 

to economic conditions. However, evidence suggests that the program has 

become more responsive since the late 1990s. For example, over the 1976-

1997 period, the correlation coefficient between year-to-year change in 

the unemployment rate and year-to-year change in WIC participation was 

-0.16—indicating that there was a small reduction in WIC participation 

when the unemployment rate increased, contrary to what would be expected. 

However, the correlation coefficient rose to 0.60 over the more recent years of 

1998-2010. 

The dramatic difference in the relationship between WIC participation and 

the unemployment rate in these two time periods was due to changes in the 

program’s funding levels. Unlike SNAP, WIC is a discretionary program 

funded by appropriations law. The number of eligible applicants who can 

be served depends on the annual appropriation, cost of the foods provided 

to participants, and other costs of operating the program. When funds are 

limited, WIC agencies use a priority system to ration benefits to those at the 

highest nutritional risk. Until the late 1990s, WIC was not fully funded–that 

is, appropriated funds were not sufficient to serve all eligible applicants who 

wanted to participate. Since data were not collected on whether applicants 

were turned away from local WIC clinics because of lack of funds, it is not 

possible to determine when the program became fully funded. However, 

anecdotal evidence suggests that sometime in the late 1990s WIC became 

fully funded, enabling all eligible applicants to the program to participate and 

making caseloads more responsive to economic conditions. We chose 1998 as 

the start of the full-funding period. After this time, WIC caseloads appear to 

have become more responsive to economic conditions. 

During the pre-full-funding period (1976-97), participation increased 

each year, regardless of whether the unemployment rate was increasing 

or decreasing (fig. 6). The rising caseload was due to annual increases in 

Congressional appropriations that were stimulated largely by evaluations 

showing WIC to be a successful and cost-effective program.16 The finding by 

Bitler, et al. (2003, p. 1,168) that “WIC participation was not strongly related 

to state-level indicators of need as measured by the unemployment rate and 

16For example, a study by Devaney et 

al. (1990), based on 1987-88 data from 

five States, found that each dollar spent 

on prenatal WIC services yielded a 

$1.77 to $3.13 savings in Medicaid costs 

for newborns and mothers over the first 

60 days after birth. The U.S. General 

Accounting Office (1992) statistically combined results from 17 studies 

conducted between 1971 and 1988 

that compared rates of low birthweight 

among WIC participants and similar 

nonparticipants and concluded that 

“each Federal dollar invested in WIC 

benefits returns an estimated $3.50 over 

18 years in discounted present value.”
17

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poverty rate,” based on data for 1992 to 2000, supports this report’s finding 

that WIC was not sensitive to economic conditions during this pre-fullfunding period. 

The increase in participation varied during the pre-full-funding period. 

During 1976-89, participation increased by an average 270,000 participants 

per year, while during 1990-97 it increased by an average 411,000 participants per year (fig. 7 and appendix B, table 2).17 The more rapid growth in 

the annual average number of participants during 1990-97 was due largely 

to the startup of State-initiated infant formula rebate programs in the late 

1980s.18 Typically, State agencies obtain significant discounts in the form of 

rebates from infant formula manufacturers for each can of formula purchased 

through the program, and, in exchange, a manufacturer is given the exclusive 

right to provide its product to WIC participants in that State. The effect of 

rebates on costs is substantial. For example, the average cost of the monthly 

WIC food package in 1998 was $47.03 before rebates and $31.76 after rebates 

(Bartlett et al., 2000). By lowering costs, the rebate program enabled more 

eligible persons to be served. The program was so successful that, since 1989, 

Federal law has required that WIC State agencies enter into cost-containment 

contracts for the purchase of infant formula used in WIC. 

Participation patterns during the pre-full-funding period varied among 

participant categories. For much of the time, the number of women and 

infants participating in WIC increased more than the number of children in 

the program.19 In general, infants and pregnant and breastfeeding women 

have a higher priority for participating in WIC than do children, and so 

they are more likely to be selected to participate when program funds are 

limited. However, during 1993-97, the number of children participating in 

the program increased more than infants and women (fig. 7). As program 

funding expanded and approached full-funding levels, a greater number of 

lower priority applicants, such as children, were able to participate. At the 

same time, the number of births declined, which would have reduced the pool 

of eligible women and infants and thus limited the growth in their participation (for trends in the number of births, see Hamilton et al. (2010) and Sutton 

and Hamilton (2011)).

Once WIC reached full-funding levels, participation appears to have become 

more sensitive to the unemployment rate. For instance, during 1998-2000, the 

economy was expanding and the number of participants fell each year, the only 

decrease in total participation during the study period (fig. 6). This result is not 

surprising given that once the program reached full-funding levels, favorable 

economic conditions would be expected to decrease the number of incomeeligible applicants. The reduction in participation occurred through a reduction 

in the number of children participating in the program (fig. 7). Mothers with 

children are presumably more able to take advantage of increased employment 

opportunities resulting from economic growth than are pregnant women and 

women with infants, thereby reducing the number of children who are incomeeligible to participate. Also, a decrease in births during the previous 5 years 

likely contributed to a decrease in the number of participating children. Finally, 

passage of the 1998 William F. Goodling Child Nutrition Reauthorization Act 

(P.L. 105-336) likely contributed to the decrease in participants by requiring 

that most WIC applicants be physically present at certification, document their 

income, and present proof of residency. 

17There is some year-to-year variation with the annual average increase 

in monthly participation. Of particular 

note is the relatively small increase 

in participation from 1981 to 1982 

(fig. 6) due to the Omnibus Budget 

Reconciliation Act of 1981, which 

restrained the growth of funding to 

WIC and other programs to slow the 

growth of Government spending and 

reduce the budget deficit.

18Also in 1989, legislation was 

enacted that established adjunct 

eligibility to recipients of food stamps, 

Medicaid, and Aid to Families with 

Dependent Children (AFDC), with the 

intent of simplifying the WIC application process. Swann (2010) attributes 

the increase in WIC participation from 

1983 to 2006 in part to expansions 

in Medicaid. However, the impact of 

Medicaid expansion may be overstated 

as the study did not take into account 

the effect that the implementation 

of infant formula rebates had on the 

increase in WIC participation. The 

study also did not consider that for 

much of the study period WIC was 

not fully funded and participation was 

rationed. When the legislation was 

implemented in 1989, the income eligibility criterion for Medicaid was lower 

than the 185 percent of poverty for 

WIC. Subsequently, some States now 

enable people with income above 185 

percent of poverty to enroll in Medicaid 

and, therefore, to be eligible for WIC. 

However, administrative data for 1992 

to 2008 show that during this period, 

at most only 2 percent of WIC participants had income above 185 percent of 

poverty (Connor et al., (2010)).

19The number of women and infants 

participating in WIC track closely and 

are combined in our analysis.
18

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Although total participation and the number of children in WIC fell each year 

during the 1998-2000 period of economic growth, the number of women and 

infants in WIC increased slightly (fig. 7); again, pregnant women and women 

with infants are less likely to be able to take advantage of employment opportunities resulting from economic growth and more likely to meet the WIC 

income-eligibility requirements.20 The increase in births during the period 

also likely contributed to the increase of women and infants in the program. 

During the 2001-03 period of economic decline, participation increased by an 

average 2 percent (146,000 participants) per year (fig. 7). Although there was 

little change in the number of births during the period, the increase in births 

during the 1998-2000 period likely contributed to the increase in participation among children during the 2001-03 period. 

20WIC regulations allow for 

considerable flexibility in how WIC 

agencies interpret the period used in 

determining an applicant’s income 

eligibility. WIC State agencies may 

“consider the income of the family 

during the past 12 months and the 

family’s current income to determine 

which indicator more accurately 

reflects the family’s status” (7 CFR 

246.7). Women are less likely to be 

working in the period shortly before 

and after a birth, and therefore are 

more likely to meet the program’s 

income eligibility requirements based 

on the family’s “current” income.

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on USDA Food and Nutrition Service data and U.S. Department of Health

and Human Services data.

Figure 7

Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) participation and births, 

annual average change during periods of economic growth and decline

Millions of WIC participants and births

1976-79

growth

80-83

decline

84-89

growth

90-92

decline

93-97

growth

98-2000

growth

01-03

decline

04-07

growth

08-10

decline

-0.2

-0.1

0

0.1

0.2

0.3

0.4

0.5

Total participation Women and infants Children Total U.S. births

Pre-full finding Full finding

growth growth growth

growth

decline decline decline decline

Source: USDA Food and Nutrition Service data.

Figure 6

Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) participation, fiscal years 1976-2010 

Millions of WIC participants

Total participation Women and infants Children

1976 78 80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10

0

2

4

6

8

10
19

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During the 2004-07 period of economic growth, participation continued to 

expand by an average 2 percent (164,000 participants) per year. This contrary 

result was also found in the relationship between SNAP participation and the 

unemployment rate. Although the economy was growing and the unemployment rate was falling, the poverty rate remained close to the levels reached 

during the 2001 recession, which suggests that the economic situation for a 

significant segment of the U.S. population did not improve. It is also likely 

that the increase in births during the period contributed to this increase in 

WIC participation.

During the 2008-10 period of rising unemployment, participation increased 

by an average 3.5 percent (296,000 participants) per year. This increase 

occurred primarily among children, whose participation increased by an 

average 6.5 percent (279,000 children) per year (fig. 7). The increase in 

WIC participation might have been greater during the 2008-10 period, but a 

decrease in the number of births during these years likely limited the increase 

in the number of women and infants participating in the program, as well as 

the number of children.

The increase was larger during the first 2 years of the 2008-10 period, when 

WIC experienced an average 5 percent (418,000 participants) per year growth 

in participation—primarily among children, whose number increased by an 

average 8.2 percent (344,000 children) per year (appendix B, table 2). Despite 

the continued rise in unemployment in 2010, the growth in WIC participation 

slowed. For the first time in the program’s history, the combined number of 

women and infants fell, the likely result of a decrease in births during 2010. 

The number of children in the program continued to increase, but by less 

than half of the increase during 2008-09. The lower number of births in the 

previous 2 years may have limited growth in the number of children participating in 2010.21

After normalizing for the change in the unemployment rate, the authors 

found that WIC participation increased by an annual average of 170,000 

participants per 1-percentage-point increase in the unemployment rate during 

the 2008-10 period (appendix B, table 7). Due to the effect of a reduction 

in births, the increase in participation during this period was somewhat 

less than the 200,000- to 223,000 change in the number of participants per 

1-percentage-point change in the unemployment rate that occurred during 

two of the other three fully funded periods, 1998-2000 and 2001-03. During 

the 2004-07 period of economic growth, participation increased despite the 

fall in the unemployment rate.

WIC Summary 

During the pre-full-funding era of WIC, the annual average increase in 

total participation was budget-driven, and the magnitude of the increase 

was 50 percent greater when infant formula rebates were implemented in 

1989. Since the late 1990s, when the program became fully funded, participation appears to have responded to the unemployment rate, although the 

relationship between the unemployment rate and WIC participation was 

also influenced by the number of births. After full funding, WIC participation increased during the two periods of economic decline that followed 

(2001-03 and 2008-10) and decreased during one of the two periods of 

21During 2009, States implemented 

revisions to the food packages that 

provided WIC participants with a wider 

variety of food and WIC State agencies 

with greater flexibility in prescribing 

food packages for participants with 

cultural food preferences. These 

changes in the composition of the WIC 

food packages may have had an effect 

on participation in 2010, but it is unclear 

in what direction and to what degree.
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economic growth (1998-2000). During the other period of economic 

growth (2004-07), WIC participation increased as poverty rates remained 

high despite a declining unemployment rate (a similar pattern was observed 

with SNAP participation). Changes in the number of births affected the 

magnitude of changes in participation, as during 2008-10, when a reduction in the number of births led to a decrease in participation by women 

and infants in 2010 and only a small increase during 2008-09, limiting 

the growth in participation that would normally have occurred in response 

to the economic decline. These results point out the importance of taking 

the trend in births into account in analyzing the relationship between WIC 

participation and the unemployment rate. 
21

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National School Lunch Program (NSLP)

Established in 1946, NSLP—the largest of USDA’s child nutrition programs—

provides nutritious lunches at low or no cost to students. Schools that choose 

to participate in the program receive cash subsidies and foods from USDA to 

offset the cost of food service. In return, the schools must serve lunches that 

meet Federal nutrition requirements and offer free or reduced-price lunches to 

needy children. Any student in attendance at a participating school is entitled 

to participate in the program. Children from families with incomes at or below 

130 percent of the Federal poverty guidelines are eligible for free meals, and 

those from families with incomes greater than 130 percent and at or below 185 

percent of the poverty guidelines are eligible for reduced-price meals. Children 

from families with incomes over 185 percent of the poverty guidelines pay full 

price, although their meals are still subsidized to a small extent. In 2010, 90 

percent of U.S. students were in schools, both public and private, that chose to 

offer the program. That same year, 57 percent of all students participated in 

the NSLP, with 55 percent of them receiving free meals, 10 percent receiving 

reduced-price meals, and 35 percent receiving full-price meals.

Economic conditions do not appear to have any impact on the total number of 

students receiving school lunches (see box, “National School Lunch Program 

(NSLP) Total Participation and the Unemployment Rate,” p. 22). However, 

there is evidence that the economy does affect the percentage of NSLP participants receiving free and reduced-price meals (fig. 8).22 As economic conditions 

decline, household income falls, and more participants become eligible for free 

and reduced-price meals. Consequently the percentage of NSLP participants 

receiving free and reduced-price meals tends to increase. Because the number 

of participants receiving free and reduced-price meals also increased during 

each year of the study with the growth in school enrollment, the percentage 

receiving free and reduced-price meals is a better indicator for measuring the 

influence of economic conditions than the number of participants. 

During the 1976-79 growth period, the percentage of NSLP participants 

receiving free and reduced-price meals increased an average 2 percent per 

year, contrary to expectations (fig. 9 and appendix B, table 3).23 However, 

the percentage of NSLP participants receiving free and reduced-price meals 

increased during the first 2 years and decreased during the last 2 years of the 

period. The favorable economic conditions during the period likely contributed to the reduction in the percentage of NSLP participants receiving free 

and reduced-price meals that occurred during 1978-79, the first decrease since 

implementation of the free and reduced-price meal system (fig. 8). The increase 

during 1976-77 was the continuation of a past trend, reflecting an increase in 

program availability during an era of program expansion.

The percentage of NSLP participants receiving free and reduced-price 

meals increased during 1980-83 by an average 4.3 percent per year (fig. 9). 

However, this result was not due to a shift in participation from full-price 

to free and reduced-price meals, but rather to a large reduction (average 7.4 

percent per year) in full-price participants due to program policy changes 

along with only a small (average 0.4 percent per year) increase in free and 

reduced-price participation. The Omnibus Budget Reconciliation Act of 1981 

reduced the Federal reimbursement rates paid to schools for both full-price 

22In this report, students receiving 

free lunches and students receiving 

reduced-price lunches were combined 

into one group. In recent years, some 

States and school districts have eliminated the reduced-price fee for breakfast and/or lunch and have provided 

free meals to children eligible for 

reduced-price meals. These programs 

are known as elimination of reducedprice fee (ERP) programs. The U.S. 

Government Accountability Office 

(2009) identified at least 5 Statewide 

ERP programs (CO, ME, MN, VT, and 

WA) and 35 district-level programs in 

19 other States during the school year 

2008-09.

23Program participation refers to the 

average daily number of participants.
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and reduced-price lunches. As a result of the decreased reimbursement, some 

schools dropped out of the program. In addition, some of the schools that 

remained in the program responded by raising the prices of school meals, 

and some students reacted by bringing their lunches rather than paying the 

higher prices (U.S. General Accounting Office, 1984), reducing the number 

of participants receiving full-price meals.24

During the 1984-89 period of economic growth, the percentage of NSLP 

participants receiving free and reduced-price meals decreased by an average 

1.6 percent per year (fig. 9). This was the only period in which the percent of 

participants receiving free and reduced-price meals decreased. During the 

1990-92 period of economic decline, the percentage of NSLP participants 

receiving free and reduced-price meals increased by an average 4 percent 

per year (fig. 9). This resulted from an increase in the number of participants 

receiving free and reduced-price meals by an average 4.6 percent (540,000) 

per year and a decrease in the number of participants receiving full-price 

meals by an average 3.2 percent (400,000) per year (fig. 10 and appendix B, 

24The 1981 Act also raised the 

income limit for free lunches from 125 

to 130 percent of poverty and lowered 

the limit for reduced-price lunches 

from 195 to 185 percent of poverty 

(U.S. General Accounting Office, 

1984). In response to the change in 

income limits, some students moved 

into a price category requiring them to 

pay more for lunch while others paid 

less, with the net effect on the percent 

of students receiving free and reducedprice meals unclear.

Unlike SNAP and WIC programs, in which receipt of benefits is tied to income, 

all children attending schools that offer NSLP may participate regardless of their 

family’s income. While NSLP is available to the vast majority of schoolchildren, 

close to 40 percent do not participate in the program. The question is whether 

nonparticipating students, most of whom are probably above the income cutoff 

level for free and reduced-price meals, would be influenced to participate as 

economic conditions decline. For example, some parents who prepare a lunch 

for their children or give them money to eat off-campus may save by having the 

children get a school meal, even at full price (though subsidized to some extent). 

Other parents of children participating in the program at full price may decide 

they can economize by packing an inexpensive meal prepared at home. The point 

is that changes in economic conditions could affect the participation decisions 

not just of those eligible for free and reduced- price meals, but also of those who 

must pay for a full-price meal.

However, the data suggest that the number of children participating in the NSLP 

bears little relationship to economic conditions (fig. 8). In fact, the correlation 

coefficient between the year-to-year change in NSLP participants and the year-toyear change in the unemployment rate from 1976 to 2010 was -0.35; the negative 

value means that a rise in the unemployment rate is actually associated with a 

decrease in NSLP participation. Throughout most of the study period, the number 

of NSLP participants increased each year regardless of whether the economy was 

growing or in decline.1 The percent of students who participated in the program 

was stable over the study period, with an average of 53 percent, a maximum of 

58 percent, and a minimum of 50 percent. Consequently, total participation in 

the NSLP does not appear to be affected by economic conditions. Instead, it is 

closely related to school enrollment, with a correlation coefficient of 0.88 during 

the study period (fig. 8). 

1The only exception was a 3-year period from 1980 through 1982 that coincided with a 

falling school enrollment and the enactment of the Omnibus Budget Reconciliation Act 

of 1981 (P.L. 97-35), which tightened the eligibility criteria for both schools and students 

and decreased the Federal reimbursement rates for school meals (U.S. General Accounting Office, 1984).

National School Lunch Program (NSLP) Total 

Participation and the Unemployment Rate
23

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table 3). This shift from full-price meals to free and reduced-price meals is 

what would be expected during an economic decline.

Direct certification, implemented during the 1990-92 period, likely 

augmented the increase in the percentage of participants receiving free and 

reduced-price meals due to economic conditions. Prior to the 1990s, all 

families who wanted their children to receive free or reduced-price meals 

had to complete and submit application forms to their school; the schools 

then applied eligibility rules to determine whether the children qualified. 

In 1989, Public Law 101-147 (the Child Nutrition and WIC Reauthorization 

growth decline growth decline growth decline growth decline

Source: USDA Food and Nutrition Service data and U.S. Department of Education data.

Figure 8

National School Lunch Program (NSLP) participation, school enrollment, and percentage of participants 

receiving free and reduced-price meals, fiscal years 1976-2010 

Millions of students and NSLP participants

Total participation School enrolllment Free and reduced-price participation

1976 78 80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10

0

10

20

30

40

50

60

70

0

10

20

30

40

50

60

70

Percent free and reduced-price meals

Percent free and reduced-price meals

Years shown are fiscal years.

Source: USDA Economic Research Service, based on USDA Food and Nutrition Service data.

Figure 9

Annual average percent change in percentage of National School 

Lunch Program (NSLP) participants receiving free and reduced-price 

meals during periods of economic growth (blue) and decline (red) 

Percent

08-10

decline

04-07

growth

01-03

decline

93-2000

growth

90-92

decline

84-89

growth

80-83

decline

1976-79

growth

-2

-1

0

1

2

3

4

5
24

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Act of 1989) granted school food authorities the option to certify children 

for free school meals with direct certification by using documentation from 

the State or local welfare office indicating that a child was a member of a 

household receiving food stamps or benefits from AFDC (U.S. Department of 

Agriculture, 2010b). A study of the direct certification process by Jackson et 

al. (2000) found that school districts began using direct certification in 1991, 

and by fall 1996, it was being used in 63 percent of all NSLP districts, representing 72 percent of all students nationwide. Jackson et al. estimated “that 

each additional year of direct certification leads to a statistically significant 

increase of 0.27 percentage points in the percent of enrollment that participates in the lunch program and receives free meals.”

During the economic growth period 1993-2000, the percentage of NSLP participants receiving free and reduced-price meals continued to increase, although 

by an average of only 1 percent per year (fig. 9). Some of this contrary result 

may be explained by the continued implementation of direct certification. But 

by the late 1990s, the adoption of direct certification had slowed (Jackson et 

al., 2000) and the percentage of NSLP participants receiving free and reducedprice meals started to fall (fig. 8). This decrease was reinforced when the 

Personal Responsibility and Work Opportunity Reconciliation Act of 1996 

(P.L. 104-193, also known as welfare reform), replaced the AFDC program 

with the TANF program. Because fewer children were eligible for TANF than 

had been eligible under AFDC, fewer were now eligible for free school meals 

under direct certification (Jackson et al., 2000). 

As expected, the percentage of NSLP students receiving free and reducedprice meals increased during the 2001-03 period of economic decline. 

However, the average 0.8 percent increase per year in the percentage of free 

and reduced-price meals was smaller than in all other periods of economic 

decline (fig. 9). 

Counter to expectations regarding the effect of economic conditions, the 

percentage of free and reduced-price meals continued to increase during 

the 2004-07 economic growth period, although at the low average rate of 

Years shown are fiscal years. 

Source: USDA Economic Research Service calculations based on USDA Food and Nutrition Service data.

Figure 10

National School Lunch Program (NSLP) participation: annual average change during periods of economic 

growth and decline 

Millions of NSLP participants

1976-79

growth

80-83

decline

84-89

growth

90-92

decline

93-2000

growth

01-03

decline

04-07

growth

08-10

decline

Total participation Free and reduced-price participation Full-price participation

-1.5

-1.0

-0.5

0

0.5

1.0
25

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0.4 percent per year. Once again, policy changes related to direct certification may have played a role in the increase in participation during a period 

of economic growth. In an effort to enroll more eligible children for free 

meals in the NSLP, the Child Nutrition and WIC Reauthorization Act of 

2004 (Public Law 108-265) required all school districts to establish a system 

of direct certification of children from households participating in SNAP. 

Until then, direct certification was still optional for school districts (U.S. 

Department of Agriculture, 2010b). The mandate was to be phased in over 3 

years: the largest local educational agencies were required to establish direct 

certification systems by school year 2006-07, and all local educational agencies were required to directly certify SNAP participants by school year 2008-

09. However, many State agencies—recognizing that direct certification, 

would increase participation, ease the burden on families and local educational agencies, and result in more accurate targeting of free school meal 

benefits—chose to phase in direct certification in advance of the mandate 

(U.S. Department of Agriculture, 2010b). So during a time of economic 

growth when the percentage of free and reduced-price meals would be 

expected to decrease, States were expanding their use of direct certification, 

and the percentage of NSLP participants receiving free and reduced-price 

meals increased slightly.25

During the 2008-10 period of economic decline, the percentage of NSLP 

participants receiving free and reduced-price meals increased by an annual 

average 3.3 percent per year (fig. 9), reaching a historical high of 65 percent 

of participants in 2010 (fig. 8). The rise was a result of an increase in the 

number of students receiving free or reduced-price meals and a decrease in 

the number paying full price (fig. 10). Although the change in the percentage 

of NSLP participants receiving free and reduced-price meals likely would 

have occurred even in the absence of direct certification, the legislative 

mandate in 2004 requiring all school districts to establish such certification by school year 2008-09 may have contributed to the increase due to the 

record SNAP caseloads during this period. 

After normalizing for the change in the unemployment rate, the authors found 

that the percentage of NSLP participants receiving free and reduced-price 

meals increased by an annual average of 1.9 percent per 1-percentage-point 

increase in the unemployment rate during the 2008-10 period (appendix 

B, table 8). The 1.9-percent change falls into the lower end of the 1.3 to 

5.5 percent range that occurred during the three other periods of economic 

decline. The two highest increases were likely influenced by changes to 

program policy: direct certification during the 1990-92 period and the budget 

reconciliation acts during the 1980-83 period. Only in the 1984-89 period 

of economic growth was the annual average 1.9-percent decrease within the 

range that the percentage of free and reduced-price meals increased during 

the periods of economic decline. 

NSLP Summary

Economic conditions tend to influence the percentage of NSLP participants receiving free and reduced-price meals but not the total number of 

NSLP participants. During the last three periods of economic decline, 

the percentage of students participating in the NSLP who received free or 

25The Child Nutrition and WIC 

Reauthorization Act of 2004 contained 

another provision potentially affecting 

the determination of free and reducedprice meal eligibility. Prior to the 

provision, households with children 

receiving free or reduced-price meals 

were required to report changes 

in circumstances that could affect 

their eligibility, such as an increase 

in income of $50 per month ($600 

annually), a decrease in household 

size, or when the household was no 

longer certified eligible for food stamps 

or Temporary Assistance for Needy 

Families (TANF). Beginning with 

school year 2004-05, children were 

certified for the school year and up to 

30 days into the next school year. It is 

not known to what degree, if any, this 

provision affected the percentage of 

NSLP participants receiving free and 

reduced-price meals.
26

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reduced-price meals increased by an average 1 to 4 percent per year. Only 

during the 1983-89 period of economic growth did the percentage of students 

receiving free and reduced-price meals fall as expected. Although during 

the other periods of growth the percentage increased contrary to expectations, the increase was small relative to the increase during periods of 

economic decline. Direct certification was one policy that tended to increase 

the percentage of participants receiving free and reduced-price meals, even 

during periods of economic growth.
27

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School Breakfast Program (SBP)

Established in 1966 as a pilot program, the SBP was made permanent in 1975. 

The program provides nutritious breakfasts at low or no cost to students. 

Schools that choose to participate in the program receive cash subsidies from 

USDA to offset the cost of food service. In return, the schools must serve breakfasts that meet Federal nutrition requirements and offer free or reduced-price 

breakfasts to needy children. Unlike NSLP, schools may qualify for higher 

“severe need” reimbursements if 40 percent of their lunches for the prior 2 

years were served free or at a reduced price. Any student attending a participating school is entitled to participate in the program. Children from families 

with incomes at or below 130 percent of the Federal poverty guidelines are 

eligible for free meals, and those from families with incomes greater than 130 

percent and at or below 185 percent of the poverty guidelines are eligible for 

reduced-price meals. Children from families with incomes over 185 percent of 

the poverty guidelines pay full price, although their meals are still subsidized 

to a small extent. In 2010, 81 percent of students were in schools, both public 

and private, that chose to participate in the program. That same year, 21 

percent of student enrollment participated in the SBP, with 74 percent of SBP 

participants receiving free meals, 9 percent receiving reduced-price meals, 

and 17 percent paying full price. 

As with the NSLP, economic conditions do not appear to have any impact on 

the total number of students receiving school breakfasts (see box, “School 

Breakfast Program (SBP) Total Participation and the Unemployment Rate,” 

p. 28). There is evidence, however, that the economy does impact the 

percentage of SBP participants receiving free and reduced-price meals (fig. 

11). The percentage of SBP participants receiving free and reduced-price 

meals increased an average 0.6 percent per year during the 1976-79 period of 

economic growth (fig. 12 and appendix B, table 4). Although this result was 

contrary to expectations, the favorable economic conditions apparently had an 

impact during the latter half of this period as the percentage of SBP participants receiving free and reduced-price meals decreased in both 1978 and 1979. 

During the first several years after the program was permanently authorized, 

it was targeted to schools in low-income areas with a greater need for subsidized breakfasts, and thus there was an increase in the percentage of free and 

reduced-price meals.

The percentage of SBP participants receiving free and reduced-price meals 

increased by an average 1.8 percent per year during the 1980-83 period of 

economic decline, the largest average annual change for the program among 

the eight economic periods (fig. 12). As with the NSLP, however, the increase 

was probably due as much to the Omnibus Budget Reconciliation Act of 1981 

as to economic conditions.26

As expected, the percentage of SBP participants receiving free and reducedprice meals decreased by an average 0.6 percent per year during the 1984-89 

period of economic growth, increased by an average 0.4 percent per year 

during the 1990-92 period of decline, and then decreased by an average 0.5 

percent per year during the 1993-2000 period of economic growth (fig. 12). It is 

possible that grants to schools to help start up the SBP, which were reauthorized 

in 1994 legislation (extending 1989 legislation), influenced the decrease in the 

26The Act of 1981 reduced the 

Federal reimbursement rates paid to 

schools for both full-price and reducedprice breakfasts. As a result, the number 

of participants receiving full-price 

meals fell while the number receiving 

free and reduced-price meals rose, 

although by an amount smaller than 

would be expected during an economic 

decline (appendix B, table 4).
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The number of SBP participants is largely determined by school 

enrollment and the decision by schools to make the program 

available to students, with economic conditions playing a minor 

role, if any. The correlation coefficient between the year-toyear change in SBP participation and the year-to-year change 

in the unemployment rate from 1976 to 2010, the period of the 

study, was very small at 0.03. Over almost the entire period, 

participation in the program increased each year, regardless of 

whether the economy was growing or in decline (fig. 11).1 After 

growing slowly in the 1980s, participation increased at a faster 

rate starting around 1990, which coincided with the passage 

of the Child Nutrition and WIC Reauthorization Act of 1989 

that provided special grants to States to help defray the costs 

of starting up new School Breakfast Programs (P.L. 101-147).2

From 1990 to 2010, participation in the SBP increased at a rate 

of 5.5 percent per year (fig. 11). This was over four times greater 

than the annual average 1.3 percent increase in total National 

School Lunch Program (NSLP) participation over the same 

period and over five times greater than the annual average 0.9 

percent increase in school enrollment. 

The fact that the SBP is a relatively young program (it 

was not granted permanent authorization until 1975) helps 

explain why it grew much faster than the NSLP during 

the study period. The availability of the program—that 

is, the percent of all students enrolled in schools that offer 

the school meals—started out significantly lower for SBP 

than for NSLP, which has been widely available since the 

1970s (box fig.). For example, in 1976, over 90 percent of 

students attended a school that participated in the NSLP, 

compared with less than 20 percent of students who attended 

a school participating in the SBP. As more schools joined 

the SBP, program availability approached that of the NSLP, 

which remained basically unchanged. By 2010, 81 percent 

of all students attended a school that participated in the 

SBP, compared with 90 percent who attended a school 

participating in the NSLP. Despite its relatively faster growth, 

the average number of participants in the SBP is only about 

36 percent that of the NSLP. Although program availability 

rates between the two programs have converged, student 

participation rates—the percentage of students in schools 

that offer NSLP or SBP who receive school meals—differ 

widely. From 1983 to 2010, the average participation rate for 

the NSLP was 59 percent, compared with only 22 percent for 

the SBP. There was little change in the participation rate for 

either program over this period.

School Breakfast Program (SBP) Total Participation 

and the Unemployment Rate

1The only exception was in 1982 when the Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35) reduced the Federal reimbursement rates to schools for school meals, causing schools to raise the prices of school meals, which led to a drop in participation (see the 

previous chapter on NSLP for more information on the legislation).

2The legislation authorized funds for the start-up grants through fiscal 1994. The Healthy Meals for Healthy Americans Act of 

1994 (P.L. 103-448) made the start-up grants permanent and also expanded coverage to include SBP expansion (U.S. Department of 

Agriculture, 1996).

Source: USDA Food and Nutrition Service data.

Program availability for SBP and NSLP: Percent of students enrolled in schools offering 

the programs, fiscal years 1976-2010

Percentage of students

growth growth growth growth decline decline decline decline

SBP program availability NSLP program availability

1976 78 80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10

0

10

20

30

40

50

60

70

80

90

100
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percentage of SBP participants receiving free and reduced-price meals during 

the 1993-2000 period of growth. As program availability expanded into higher 

income areas, it was likely that the percentage of participants receiving free and 

reduced-price meals would decrease as schools with a greater need for subsidized breakfasts would already have entered the program.

Counter to expectations, during the 2001-03 period of economic decline 

the percentage of SBP participants receiving free and reduced-price meals 

decreased by an average 0.5 percent per year (fig. 12), while—as expected— 

the percentage of SBP participants receiving free and reduced-price meals 

decreased by an average 0.7 percent per year during the 2004-07 period of 

economic growth. As with earlier periods, it is possible that the continued 

growth decline growth decline growth decline growth decline

Source: USDA Food and Nutrition Service data.

Figure 11

School Breakfast Program (SBP) participation and percentage of participants receiving free 

and reduced-price meals, fiscal years 1976-2010 

Millions of SBP participants Percentage SBP participants

Total participation Free and reduce-price participation Percentage receiving free and reduced-price meals

1976 78 80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10

0

2

4

6

8

10

12

0

20

40

60

80

100

Years shown are fiscal years.

Source: USDA Economic Research Service, based on USDA Food and Nutrition Service data.

Figure 12

Annual average percent change in percentage of School Breakfast 

Program (SBP) participants receiving free and reduced-price meals 

during periods of economic growth (blue) and decline (red) 

Percent

08-10

decline

04-07

growth

01-03

decline

93-2000

growth

90-92

decline

84-89

growth

80-83

decline

1976-79

growth

-1.0

-0.5

0

0.5

1.0

1.5

2.0
30

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expansion of program availability would have been in higher income areas 

with less need for subsidized breakfasts, contributing to the decrease in the 

percentage of SBP participants receiving free and reduced-price meals during 

both of these periods. 

During the 2008-10 period of economic decline, the percentage of SBP 

participants receiving free and reduced-price meals increased by an average 

1.3 percent per year. Total participation increased as part of a long-term 

trend, and the increase in the number of participants who received free and 

reduced-price meals was about equal to the increase in total participation, 

while the change in the number of participants paying full price decreased 

slightly (appendix B, table 4). This shift, though not large, is as expected 

during a period of economic decline.

After normalizing for the change in the unemployment rate, the authors found 

that the percentage of SBP participants receiving free and reduced-price 

meals increased by an annual average 0.7 percent per 1-percentage-point 

increase in the unemployment rate during the 2008-10 period (appendix B, 

table 9). This change was close to the annual average 0.6-percent increase 

during the 1990-92 period of economic decline, but not at all similar to the 

change during the other periods of economic decline, a likely outcome of 

policy changes. In the three most recent periods of economic growth, there 

was an annual average 0.8- to 1.9-percent decrease in the percentage of SBP 

participants receiving free and reduced-price meals per 1-percentage-point 

decrease in the unemployment rate. 

SBP Summary

The total number of participants in the SBP does not appear to be related 

to economic conditions. For almost the entire study period of 1976-2010, 

participation in the program increased each year—regardless of whether 

the economy was growing or in decline—as school enrollment and the 

number of schools offering the program grew. On the other hand, economic 

conditions do appear to affect the percentage of SBP participants receiving 

free or reduced-price meals. In three of the four periods of economic 

decline, the percentage of participants receiving free or reduced-price 

meals increased, and in three of the four periods of economic growth, that 

percentage decreased. 

The percentage of participants receiving free and reduced-price meals has 

always been greater in SBP (83 percent in 2010) than in NSLP (65 percent 

in 2010), and the economy’s effect on the percentage of SBP participants 

receiving free and reduced-price meals—especially during the periods of 

economic decline—has been much less than its effect on the NSLP. 
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Child and Adult Care Food Program (CACFP)

Established in 1968, CACFP provides economic incentives for day care facilities to provide nutritious meals that contribute to the wellness, healthy growth, 

and development of young children and the health and wellness of adults in 

day care. The program reimburses providers for meals served to eligible children and adults who are enrolled for care at participating day care homes, 

child care centers, and adult day care centers. CACFP also provides meals 

and snacks to at-risk children and youth who participate in eligible afterschool programs or reside in emergency shelters. Providers of care are reimbursed at fixed rates per meal, with different reimbursement rates for each 

type of meal served (breakfast, lunch, dinner, and snack). 

In the day care homes portion of CACFP, participating homes (i.e., homes 

in which the providers care for children other than their own or a combination of others’ children and their own children) are reimbursed for meals and 

snacks at two rates. Homes that are either located in low-income areas or run 

by a provider whose family income is at or below 185 percent of the Federal 

poverty guideline receive higher (tier I) rates. Other homes receive lower (tier 

II) rates, with meals and snacks served to low-income children reimbursed at 

the tier I rates. 

Day care centers are also reimbursed by type of meal served, but at three 

different rates depending on the family incomes of the children in care. Free 

and reduced-price eligibility rules and reimbursement rates are identical to 

those in the NSLP and SBP. Eligible public or private nonprofit child care 

centers, outside-school-hours care centers, Head Start programs, and other 

institutions licensed or approved to provide day care services, may participate 

in CACFP, either independently or as sponsored centers. 

Under the program’s adult care portion, CACFP provides meals and snacks 

to adults who receive care in nonresidential adult day care centers. Public or 

private nonprofit adult day care facilities that provide structured, comprehensive services to nonresidential adults who are functionally impaired or aged 

60 and older may participate in CACFP as independent or sponsored centers. 

In 2010, 3.4 million participants received 1,910 million meals. Adults received 

3.5 percent of the meals, while the remaining 96.5 percent of the meals were 

served to children in child care homes (31.2 percent) and in child care centers 

(65.3 percent). Eighty-two percent of all meals served in the program were 

free or reduced-price. 

As with the other child nutrition programs, economic conditions do not 

appear to have an impact on the total number of CACFP meals (see box, 

“Child and Adult Care Food Program (CACFP) Total Participation and the 

Unemployment Rate,” p. 32). However, there is evidence that the economy 

does impact the percentage of CACFP meals that are free and reduced-price 

(fig. 13).27 In general, when economic conditions declined over the study 

period (1976-2010), the percentage of total meals that were free and reducedprice increased, and when economic conditions improved, the percentage 

decreased. Program policy changes also affected the percentage of meals that 

were free and reduced-price. 

27Meals served at day care homes 

with Tier I and Tier II reimbursement 

are treated as free and reduced-price 

meals. The data for CACFP pertain to 

the percent of meals that are free and 

reduced-price, while the data for the 

other child nutrition programs (NSLP 

and SBP) pertain to the number and 

percent, of participants (children in 

schools) who receive free and reducedprice meals.
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During the economic growth period of 1976-79, the percentage of total 

CACFP meals that were free and reduced-price fell by an average 2.2 percent 

per year (fig. 14 and appendix B, table 5). Legislation in 1975 (P.L. 94-105) 

established a three-tiered reimbursement structure that likely reduced the 

percentage of free and reduced-price meals. During the 1980-83 period of 

economic decline that followed, the percentage of total meals that were free 

and reduced-price increased by an average 1.6 percent per year. However, the 

average over the period obscures the sharp increase over the first half of the 

period followed by a sharp decrease in the latter half (fig. 13). The change to 

the reimbursement structure in the 1978 legislation (P.L. 95-627) would have 

increased the percentage of free and reduced-price meals during 1980 and 

1981, while the Omnibus Budget Reconciliation Act of 1981, which reduced 

growth decline growth decline growth decline growth decline

Source: USDA Food and Nutrition Service data.

Figure 13

Child and Adult Care Food Program (CACFP) participation and percentage of total meals that were free 

and reduced-price, fiscal years 1976-2010 

Millions of CACFP participants Percent free and reduced-price meals

Total participation Free and reduce-price participation Percent free and reduced-price meals

1976 78 80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

20

40

60

80

100

As in the other child nutrition programs examined in this report (NSLP and 

SBP), overall participation in CACFP does not appear to be related to economic 

conditions. The correlation coefficient between the year-to-year change in 

CACFP participation and the year-to-year change in the unemployment rate from 

1976 to 2010 was negligible at 0.04. In fact, throughout the entire study period, 

the number of CACFP participants increased each year regardless of whether 

the economy was growing or in decline (fig. 13). The number of participants is 

a function of the availability of the program, which is dependent on the number 

of centers and sponsoring organizations that choose to participate.1 The number 

of these day care centers and sponsoring organizations has increased each year 

since 1982 (the first year that data were available). There have been three distinct 

phases of caseload growth, distinguished by changes in program legislation. The 

growth in caseloads during these three phases is described in appendix C, Child 

and Adult Care Food Program (CACFP) Total Participation.

1Family child care providers must go through a food sponsor (a public or nonprofit 

private organization responsible for administration of the program) and cannot apply to 

the program directly.

Child and Adult Care Food Program (CACFP) Total 

Participation and the Unemployment Rate
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reimbursement rates, limited reimbursement to two meals and one snack per 

child per day, and lowered the eligible age limit to 12, would have decreased 

the percentage of free and reduced-price meals in 1982 and 1983 (U.S. 

Department of Agriculture, 2011c). 

Subsequent changes in the percentage of meals that were free and reducedprice were small (less than 1 percent) and usually in the expected direction 

(fig. 14). The percentage decreased by an average of 0.2 percent per year 

during the 1984-89 period of economic growth, increased by 0.7 percent per 

year during the 1990-92 period of decline, and decreased by 0.24 percent 

per year during the 1993-2000 period of economic growth. The relatively 

larger change during the 1990-92 period may have been influenced by the 

Child Nutrition and WIC Reauthorization Act of 1989 (P.L. 101-147) that 

provided funds to expand family day care homes into low-income or rural 

areas. The enactment of the Personal Responsibility and Work Opportunities 

Reconciliation Act (PRWORA) in 1996 probably contributed to the decrease 

in the percentage of free and reduced-price meals during the 1993-2000 

period by lowering the maximum number of daily meals and snacks that 

could be reimbursed in child care centers from four to three and by implementing a two-tiered reimbursement structure for day care homes, which 

tended to decrease the number of day care homes that provided free and 

reduced-price meals. 

The 2001-03 period of economic decline was the only period in which the 

change in the percentage of CACFP meals that were free and reduced-price 

was opposite to what would be expected. But the percentage decrease was 

small, only 0.2 percent per year (fig. 14). The percentage of meals that were 

free and reduced-price decreased during the economic growth period of 

2004-07, as expected, falling by 0.6 percent per year, and increased by 0.3 

percent per year during the 2008-10 period of economic decline. During this 

period of economic decline, the total number of meals served increased as 

Years shown are fiscal years.

Source: USDA Economic Research Service, based on USDA Food and Nutrition Service data.

Figure 14

Annual average percent change in percentage of total Child and Adult 

Care Food Program (CACFP) meals that were free and reduced-price 

meals during periods of economic growth (blue) and decline (red)

Percent

08-10

decline

04-07

growth

01-03

decline

93-2000

growth

90-92

decline

84-89

growth

80-83

decline

1976-79

growth

-2.5

-2.0

-2.0

-1.0

-0.5

0

0.5

1.0

1.5

2.0
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part of a long-term trend, and the increase in the number of meals that were 

free and reduced-price was about equal to the increase in total meals.

After normalizing for the change in the unemployment rate, the authors 

found that the percent of total CACFP meals that were free and reducedprice increased by an annual average 0.2 percent per 1-percentage-point 

increase in the unemployment rate during the 2008-10 period (appendix B, 

table 10). The change was small and suggests that the percentage of meals 

served as free and reduced-price is not strongly influenced by a change in 

economic conditions. 

CACFP Summary 

Total participation in CACFP shows little relationship to economic conditions. Throughout the history of the program, participation has increased 

each year regardless of whether the economy was growing or in decline, 

with the degree of growth influenced by changes in program legislation. However, there is evidence that economic conditions impacted the 

percentage of CACFP meals that were free and reduced-price. In three of 

the four periods of economic decline, the percentage of meals that were free 

or reduced-price increased, and in all four periods of economic growth, 

the percentage of such meals decreased. However, the year-to-year change 

was relatively small, as the percentage of CACFP meals that were free or 

reduced-price ranged between 80 and 85.5 percent during nearly all of the 

1976-2010 study period (fig. 13).
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Discussion

USDA’s nutrition assistance programs are designed to provide nutrition assistance to those in need. As economic conditions decline, more people are in 

need of such assistance. The extent to which the programs respond to economic 

conditions is one measure of their effectiveness. The results of this study 

indicate that SNAP, as expected, is the nutrition assistance program that is 

most responsive to changes in economic conditions, with participation in the 

program clearly following the unemployment rate—the measure of economic 

growth or decline used in the study—over the business cycle. However, the 

study reveals that the other four major nutrition assistance programs are also 

impacted to some degree by economic conditions. Thus, all of the major nutrition assistance programs are countercyclical, responding to increased demand 

for their services by needy families during economic downturns.

During the recent 2008-10 period of economic decline, which encompassed 

the Great Recession, participation in SNAP and WIC and the percentage of 

participants receiving free and reduced-price meals in all three of the child 

nutrition programs (NSLP, SBP, and CACFP) increased in response to the 

rising unemployment rate. For SNAP, the increase in participation during this 

period was especially large, far exceeding that of the previous three periods of 

economic decline. The increase in WIC participation also exceeded that of the 

previous period of economic decline since the program reached full-funding 

levels in the late 1990s. The increase in the percentage of NSLP and SBP 

participants receiving free and reduced-price meals was large relative to some 

previous periods of economic decline. These results are not surprising given the 

depth of the economic decline during this period of the study, when the largest 

percentage-point increase in the unemployment rate occurred. 

For all programs except CACFP, the changes in participation, normalized for 

the change in the unemployment rate during the 2008-10 period of economic 

decline, were generally in line with those of the previous periods of economic 

decline. The consistency of the participation response among periods of 

economic decline for these programs, after normalizing, suggests that the 

large participation response during the 2008-10 period of economic decline 

reflects the magnitude of the economic downturn during the Great Recession. 

Our review of the history of each program reveals that there were many 

changes to program policies and other factors that affected participation 

(table 3). Unraveling the effects of the various factors is a challenging task. 

Previous econometric analyses of the relationship of the unemployment rate 

and participation in SNAP—the most studied of all the nutrition assistance 

programs—have been able to explain only about 50 percent of the change in 

program participation (Klerman and Danielson, 2011; Mabli et al., 2009). 

Research on participation in the non-SNAP programs that separates the 

impacts due to economic conditions from those due to policy and other 

factors is needed to enable policymakers and program analysts to better anticipate and forecast fluctuations in participation that can influence budgetary 

decisions for the programs. Isolating the impacts of the various factors on 

program participation will also increase our understanding of the effects of 

policies and help guide future policy decisions.
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Table 3

Potential factors affecting participation levels and expected effect, by program, fiscal years 1976-2010

Periods of economic growth Periods of economic decline

Program 1976-79 1984-89 1993-2000 2004-07 1980-83 1990-92 2001-03 2008-10

SNAP

 Unemployment rate (-) (-) (-) (-) (+) (+) (+) (+)

 Program policy (+) (+) (+/-) (+) (+/-) (+) (+) (+)

 Natural disasters1 (+)

 Other economic factors2 (+)

WIC:3

 Unemployment rate (-) (-) (+) (+)

 Program policy (+/-) (+)

 Funding levels (-) (-) (-) (-) (-)

 Demographics (births) (+/-) (+) (-)

 Other economic factors2 (+)

NSLP:

 Program policy (-)

 Demographics (school enrollment) (+) (+) (+) (+) (-) (+) (+) (+)

SBP:

 Program policy (-)

 Program availability (+) (+) (+) (+) (+) (+) (+)

 Demographics (school enrollment) (-) (+) (+) (+) (-) (+) (+) (+)

CACFP:

 Program policy (+) (-) (+)

 Program availability (+) (+) (+) (+) (+) (+) (+) (+)

Potential factors affecting percent of participants receiving free and reduced price meals and expected effect, by program

NSLP:

 Unemployment rate (-) (-) (-) (-) (+) (+) (+) (+)

 Program policy (+/-) (+) (+) (+)

 Other economic factors2 (+)

SBP:

 Unemployment rate (-) (-) (-) (-) (+) (+) (+) (+)

 Program policy (+) (-) (-) (+) (-)

 Other economic factors2 (+)

CACFP:

 Unemployment rate (-) (-) (-) (-) (+) (+) (+) (+)

 Program policy (-) (-) (+/-) (+)

Notes: (+) = Expected effect is to increase participation. (-) = Expected effect is to decrease participation. (+)/(-) = Two changes occurred 

during the period with opposite expected effects of decreasing and increasing participation.

SNAP=Supplemental Nutrition Assistance Program; WIC=Special Supplemental Nutrition Program for Women, Infants, and Children; 

NSLP=National School Lunch Program; SBP=School Breakfast Program; CACFP=Child and Adult Care Food Program

12005 Gulf Coast Hurricanes. 

2Low-skilled labor market conditions, such as real wages that underlie an increase in the poverty rate during a period of economic growth.

3Prior to the late 1990s, WIC was not fully funded and participation was rationed. Once WIC was fully funded, the unemployment rate started 

to impact participation.

Source: USDA Economic Research Service calculations.
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Decline in Food Stamp Participation: A Report to Congress, July.

U.S. Department of Agriculture, Food and Nutrition Service. 2010a. 

Characteristics of Supplemental Nutrition Assistance Program 

Households: Fiscal Year 2009, October.

U.S. Department of Agriculture, Food and Nutrition Service. 2010b. Direct 

Certification in the National School Lunch Program: State Implementation 

Progress School Year 2009–2010. Report CN-10-DC, October.

U.S. Department of Agriculture, Food and Nutrition Service. 2010c. 

Supplemental Nutrition Assistance Program State Options Report, Ninth 

Edition, November.
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U.S. Department of Agriculture, Food and Nutrition Service. 2011a. “SNAP: 

Program Policy, Legislation.” Accessed April 2011. http://www.fns.usda.

gov/snap/rules/Legislation/default.htm.

U.S. Department of Agriculture, Food and Nutrition Service. 2011b. Trends in 

Supplemental Nutrition Assistance Program Participation Rates: Fiscal 

Year 2002 to Fiscal Year 2009, August. 

U.S. Department of Agriculture, Food and Nutrition Service. 2011c. “CACFP: 

Legislative History.” Accessed April 2011. http://www.fns.usda.gov/cnd/

care/history.htm.

U.S. Department of Agriculture, Office of Communications. 1996. 

Agricultural Fact Book 1996. See chapter 8, Food, Nutrition, and 

Consumer Services; section on School Breakfast Program. 

U.S. Department of Labor, U.S. Bureau of Labor Statistics. 2008. Women in 

the Labor Force: A Databook (2008 edition), Report 1011, December. 

U.S. General Accounting Office. 1984. Participation in the National School 

Lunch Program: Report to the Chairman, Committee on Agriculture, 

Nutrition, and Forestry, United States Senate, GAO/RCED-84-132, 

March 30. 

U.S. General Accounting Office. 1992. Early Intervention: Federal 

Investments Like WIC Can Produce Savings, GAO/HRD-92-18, April. 

U.S. Government Accountability Office. 1999. Food Stamp Program: Various 

Factors Have Led to Declining Participation, GAO/RCED-99-185, July. 

U.S. Government Accountability Office. 2002. Food Stamp Program: State’s 

Use of Options and Waivers to Improve Program Administration and 

Promote Access, GAO-02-409, February. 

U.S. Government Accountability Office. 2004. Food Stamp Program: 

Steps Have Been Taken to Increase Participation of Working Families, 

GAO-04-346, March.

U.S. Government Accountability Office. 2009. School Meal Programs: 

Experiences of the States and Districts that Eliminated Reduced-Price 

Fees, GAO-09-584, July. 

Wertheimer, Richard, and Thaddeus Fletcher. 1985. Analysis of Interactions 

between the Macroeconomy and Food Stamp Program Changes. Prepared 

by Urban Institute and Data Resources, Inc. for U.S. Department of 

Agriculture, Food and Nutrition Service, October.

Zedlewski, Sheila, and Amelia Gruber. 2001. Former Welfare Families 

Continue to Leave the Food Stamp Program, Assessing the New 

Federalism Discussion Paper 01-05. Washington, DC: The Urban Institute, 

March. 
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Zedlewski, Sheila, and Kelly Rader. 2004. Recent Trends in Food Stamp 

Participation among Poor Families with Children, Assessing the New 

Federalism Discussion Paper 04-03. Washington, DC: The Urban 

Institute, June. 

Zedlewski, Sheila, David Wittenburg, Carolyn O’Brien, Robin Koralek, 

Sandra Nelson, and Gretchen Rowe. 2005. Evaluation of Food Stamp 

Research Grants to Improve Access Through New Technology and 

Partnerships. Prepared by The Urban Institute for U.S. Department of 

Agriculture, Food and Nutrition Service, September.
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Appendix A—Supplemental Nutrition 

Assistance Program (SNAP) Participation 

Influenced by Economy and Policy: Literature 

Review

The literature on the relationship of SNAP participation with economic 

conditions and program policy dates back to work by Wertheimer and 

Fletcher (1985) and Dynaski et al. (1991), which used national quarterly data 

to estimate the impact of early program legislation (1977 through 1988) in 

conjunction with the effects of the unemployment rate and real wages on 

SNAP participation. In addition to finding that an increase in the unemployment rate increases SNAP participation, both studies found that the Food 

Stamp Act of 1977 increased participation, while the Omnibus Budget 

Reconciliation Acts of 1981 reduced participation. Wertheimer and Fletcher 

(1985) also found that an increase in the poverty rate and a decrease in the 

real wage were associated with an increase in participation, while Dynaski 

(1991) found that the Hunger Prevention Act of 1988 increased participation.

The next round of studies used State variations in economic conditions 

and program policy, including welfare program policy, to estimate the 

dual impact of the economy and policy on SNAP participation during the 

1993-2000 period of economic growth. This period was strongly influenced 

by welfare reform.1 Kabbani and Wilde (2003) found that the fall in the 

unemployment rate explained 27 percent of the decline in participation, 

while State use of short certification periods and frequent recertification 

(e.g., every 3 months) explained 10 percent of the decline in participation. 

Kornfeld (2002) found that economic conditions explained 20 percent of 

the decline in participation, welfare reform (cross-program effects from 

changes to welfare programs) explained 21 percent, restricted eligibility for 

noncitizens and adults without dependents explained 10 percent, and SNAP 

reporting requirements (primarily short certification periods) explained 8 

percent. Currie and Grogger (2001) found that unemployment explained 

20 percent of the decline in caseloads, while welfare reform explained 30 

percent. Klerman and Danielson (2011) found that economic conditions 

explained 31 percent of the change in participation and welfare reform 

explained 13 percent. They also found that the two SNAP policies of short 

certification—positive effect—and State replacement of paper coupons with 

Electronic Benefit Transfer (EBT)—negative effect—had offsetting effects 

on participation. In summarizing the findings of a few of the studies during 

this period, Hanson and Gunderson (2002) found that a 1-percentage-point 

increase in the unemployment rate would lead to a 700,000 to 1.5 millionperson increase in SNAP participation after taking into account the influence of program policy on SNAP participation.

Another set of studies, focusing on recent years, also used variation in State 

implementation of SNAP program policy options and variation in State 

unemployment rates to estimate the impact of the economy and policy on 

SNAP participation. During this time, SNAP offered States a number of 

policy options that would be expected to increase participation, in part as 

a response to low participation rates. Ratcliffe et al. (2008) found that the 

exclusion of a vehicle from the asset test for SNAP eligibility, longer certification periods, expanded categorical eligibility, and State implementation 

1The Personal Responsibility and 

Work Opportunity Reconciliation Act 

of 1996 (welfare reform) replaced the 

Nation’s welfare program for lowincome families (Aid to Families with 

Dependent Children, AFDC) with 

the Temporary Assistance for Needy 

Families (TANF) program, which 

offered States more control over the 

design of their State welfare system. 

Some of the TANF options that States 

used had cross-program effects on 

participation in SNAP. In the empirical 

studies of SNAP participation, welfare 

reform policies refer to these crossprogram effects. Welfare reform also 

made changes to SNAP that tightened 

eligibility rules and reduced benefits, 

such as restricted eligibility for noncitizens and adults without dependents 

who are not working. In the empirical 

studies, the SNAP policy changes were 

either treated as separate polices or not 

at all since they were largely national 

policy changes.
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of EBT all increased SNAP participation, while outreach spending had 

only a small lagged impact.2 Mabli et al. (2009) found that a 1-percentagepoint increase in the unemployment rate increased per capita participation 

(normalized by State population) by 3.7 percent, or 710,000 participants, after 

accounting for State population. SNAP policies that were found to increase 

participation were expanded categorical eligibility and simplified reporting 

for earners. Outreach spending was found to increase participation only when 

the unemployment rate was relatively low. Klerman and Danielson (2011) 

found that economic conditions explained 27 percent of the change in participation, welfare policies explained 6 percent, and SNAP policies explained 16 

percent. SNAP policies of significance for participants without cash welfare 

assistance were State implementation of EBT, vehicle exclusion, lengthening 

of certification periods, and expanded categorical eligibility (broad-based). 

SNAP participation for all persons except those who received SSI cash assistance increased by 5 percent after 1 year from a 1-percentage-point change in 

the unemployment rate, and an even greater increase occurred over a longer 

period for some household types.

2Categorical eligibility eliminates 

the requirement for valuation of vehicles and other assets and the application of the resource test in determining 

eligibility. Most States have established 

categorical eligibility through “broadbased” eligibility requirements (such 

as making brochures available in certification offices or including information/800 numbers about other available 

programs on SNAP applications); other 

States have established categorical 

eligibility through “narrow” eligibility requirements (e.g., requiring 

the client to be actually enrolled in 

certain programs such as employment 

assistance or to be receiving child care 

or transportation assistance); and a 

few States have established categorical 

eligibility through the requirement that 

applicants receive cash assistance from 

a means-tested welfare program (U.S. 

Department of Agriculture, Food and 

Nutrition Service, 2010c).
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Appendix B—Tables on Estimated Annual 

Average Change in Nutrition Assistance 

Program Participation

Appendix table 1. Estimated annual average change in Special Supplemental 

Nutrition Assistance Program (SNAP) participation

Appendix table 2. Estimated annual average change in Special Supplemental 

Nutrition Program for Women, Infants, and Children (WIC) participation

Appendix table 3. Estimated annual average change in National School 

Lunch Program (NSLP) participation

Appendix table 4. Estimated annual average change in School Breakfast 

Program (SBP) participation

Appendix table 5. Estimated annual average change in Child and Adult Care 

Food Program (CACFP) participation

Appendix table 6. Estimated annual average change in Supplemental 

Nutrition Assistance Program (SNAP) participation per 1-percentage-point 

change in unemployment rate

Appendix table 7. Estimated annual average change in Special Supplemental 

Nutrition Program for Women, Infants, and Children (WIC) participation per 

1-percentage-point change in unemployment rate

Appendix table 8. Estimated annual average change in National School 

Lunch Program (NSLP) participation per 1-percentage-point change in 

unemployment rate

Appendix table 9. Estimated annual average change in School Breakfast 

Program (SBP) participation per 1-percentage-point change in unemployment 

rate

Appendix table 10. Estimated annual average change in Child and Adult 

Care Food Program (CACFP) participation per 1-percentage-point change in 

unemployment rate
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Appendix B, table 1

Estimated annual average change in Special Supplemental Nutrition 

Assistance Program (SNAP) participation

Periods of economic growth (falling unemployment rate)

1976 - 1979

Thousand participants 147

Percent 1.2

1984 - 1989

Thousand participants -470

Percent -2.3

1993 - 2000

Thousand participants -1,027

Percent -4.6

1993 - 1994

Thousand participants 1,034

Percent 4.0

1995 - 1996

Thousand participants -966

Percent -3.6

1997 - 2000

Thousand participants -2,087

Percent -9.4

2004 - 2007

Thousand participants 1,267

Percent 5.6

Periods of economic decline (rising unemployment rate)

1980 - 1983

Thousand participants 993

Percent 5.6

1980 - 1981

Thousand participants 2,389

Percent 12.9

1982 - 1983

Thousand participants -403

Percent -1.8

1990 - 1992

Thousand participants 2,200

Percent 10.6

2001 - 2003

Thousand participants 1,352

Percent 7.4

2008 - 2010

Thousand participants 4,662

Percent 15.4

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on USDA Food and Nutrition 

Service data.
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Appendix B, table 2

Estimated annual average change in Special Supplemental Nutrition Program for Women, Infants, 

and Children (WIC) participation

Total participants Women and infants Children Births

Periods of economic growth (falling unemployment rate)

1976 - 1979

Thousand participants 285 136 149 88

Percent 44.8 45.7 44.1 2.7

1984 - 1989

Thousand participants 264 157 107 67

Percent 8.6 9.8 7.4 1.8

1993 - 2000

Thousand participants 224 91 132 -1

Percent 3.7 2.9 4.7 0.0

1993 - 1997

Thousand participants 401 133 268 -37

Percent 6.5 4.2 9.1 -0.9

1998 - 2000

Thousand participants -72 23 -94 59

Percent -1.0 0.6 -2.5 1.5

2004 - 2007

Thousand participants 164 113 50 57

Percent 2.1 2.9 1.3 1.4

Periods of economic decline (rising unemployment rate)

1980 - 1983

Thousand participants 264 143 121 36

Percent 14.7 16.4 13.2 1.0

1990 - 1992

Thousand participants 428 233 196 8

Percent 9.5 9.6 9.4 0.2

2001 - 2003

Thousand participants 146 55 92 10

Percent 2.0 1.5 2.5 0.3

2008 - 2010

Thousand participants 296 18 279 -103

Percent 3.5 0.4 6.5 -2.4

2008 - 2009

Thousand participants 418 74 344 -93

Percent 4.9 1.7 8.2 -2.2

2010

Thousand participants 53 -94 147 -124

Percent 0.6 -2.1 3.1 -3.0

Years shown are fiscal years. 

Source: USDA Economic Research Service calculations based on USDA Food and Nutrition Service data.
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Appendix B, table 3

Estimated annual average change in National School Lunch Program (NSLP) participation

Total 

participants

Free and

reduced-price

participants

Full price

participants

Free and 

reduced-price as

percent of total

Periods of economic growth (falling unemployment rate)

1976 - 1979

Thousand students 525 425 100

Percent 2.0 4.1 0.7 2.0

1984 - 1989

Thousand students 196 -87 283

Percent 0.8 -0.7 2.4 -1.6

1993 - 2000

Thousand students 337 317 21

Percent 1.3 2.3 0.2 1.0

2004 - 2007

Thousand students 530 371 159

Percent 1.8 2.2 1.3 0.4

Periods of economic decline (rising unemployment rate)

1980 - 1983

Thousand students -1,000 25 -1,025

Percent -3.8 0.4 -7.4 4.3

1990 - 1992

Thousand students 144 542 -398

Percent 0.6 4.6 -3.2 4.0

2001 - 2003

Thousand students 362 341 21

Percent 1.3 2.2 0.2 0.8

2008 - 2010

Thousand students 357 845 -488

Percent 1.2 4.5 -4.0 3.3

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on USDA Food and Nutrition Service data.
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Appendix B, table 4

Estimated annual average change in School Breakfast Program (SBP) participation

Total 

participants

Free and

reduced-price

participants

Full price

participants

Free and 

reduced-price as

percent of total

Periods of economic growth (falling unemployment rate)

1976 - 1979

Thousand students 373 320 53

Percent 16.2 16.8 13.7 0.6

1984 - 1989

Thousand students 75 47 29

Percent 2.1 1.5 7.1 -0.6

1993 - 2000

Thousand students 329 253 76

Percent 5.5 5.0 9.1 -0.5

2004 - 2007

Thousand students 423 292 131

Percent 4.7 4.0 7.9 -0.7

Periods of economic decline (rising unemployment rate)

1980 - 1983

Thousand students 13 63 -50

Percent 0.7 2.5 -10.0 1.8

1990 - 1992

Thousand students 369 337 31

Percent 8.9 9.3 5.8 0.4

2001 - 2003

Thousand students 292 207 85

Percent 3.7 3.2 6.6 -0.5

2008 - 2010

Thousand students 507 525 -19

Percent 4.8 6.1 -0.9 1.3

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on USDA Food and Nutrition Service data.
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Appendix B, table 5

 Estimated annual average change in Child and Adult Care Food Program (CACFP) participation

Total 

participants

Free and

reduced-price

participants

Full price

participants

Free and 

reduced-price as

percent of total

Periods of economic growth (falling unemployment rate)

1976 - 1979

Thousand participants 56 37 19

Percent 12.5 10.1 28.8 -2.2

1984 - 1989

Thousand participants 75 61 14

Percent 6.9 6.7 7.9 -0.2

1993 - 2000

Thousand participants 113 90 22

Percent 5.3 5.0 6.7 -0.3

2004 - 2007

Thousand participants 73 43 29

Percent 2.4 1.8 5.4 -0.6

Periods of economic decline (rising unemployment rate)

1980 - 1983

Thousand participants 81 75 6

Percent 11.4 13.4 11.8 1.6

1990 - 1992

Thousand participants 144 131 13

Percent 9.6 10.4 5.5 0.7

2001 - 2003

Thousand participants 70.0 52.3 17.7

Percent 2.5 2.3 3.8 -0.3

2008 - 2010

Thousand participants 48.7 48.3 0.4

Percent 1.5 1.8 0.1 0.3

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on USDA Food and Nutrition Service data.
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Appendix B, table 6

Estimated annual average change in Supplemental Nutrition 

Assistance Program (SNAP) participation per 1-percentage-point 

change in unemployment rate

Periods of economic growth (falling unemployment rate)

1976 - 1979

Thousand participants -266

Percent -2.2

1984 - 1989

Thousand participants 579

Percent 2.8

1993 - 2000

Thousand participants 2,418

Percent 10.8

1993 - 1994

Thousand participants -1,900

Percent -7.4

1995 - 1996

Thousand participants 2,212

Percent 8.2

1997 - 2000

Thousand participants 5,814

Percent 26.1

2004 - 2007

Thousand participants -3,468

Percent -15.3

Periods of economic decline (rising unemployment rate)

1980 - 1983

Thousand participants 925

Percent 5.2

1980 - 1981

Thousand participants 3,036

Percent 16.4

1982 - 1983

Thousand participants -296

Percent -1.3

1990 - 1992

Thousand participants 3,051

Percent 14.7

2001 - 2003

Thousand participants 2,063

Percent 11.3

2008 - 2010

Thousand participants 2,680

Percent 8.9

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on data from USDA Food and 

Nutrition Service and U.S. Department of Labor, Bureau of Labor Statistics.
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Appendix B, table 7

Estimated annual average change in Special Supplemental Nutrition 

Program for Women, Infants, and Children (WIC) participation 

per 1-percentage-point change in unemployment rate

Total 

participants

Women and 

infants Children

Periods of economic growth (falling unemployment rate)

1998 - 2000

Thousand participants 201 -64 265

Percent 2.7 -1.8 7.1

2004 - 2007

Thousand participants -448 -310 -137

Percent -5.7 -7.8 -3.6

Periods of economic decline (rising unemployment rate)

2001 - 2003

Thousand participants 223 83 140

Percent 3.0 2.3 3.8

2008 - 2010

Thousand participants 170 10 160

Percent 2.0 0.3 3.7

2008 - 2009

Thousand participants 211 37 174

Percent 2.5 0.9 4.1

2010

Thousand participants 42 -75 117

Percent 0.5 -1.7 2.5

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on data from USDA Food and 

Nutrition Service and U.S. Department of Labor, Bureau of Labor Statistics.
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Appendix B, table 8

Estimated annual average change in National School Lunch Program (NSLP) participation per 

1-percentage-point change in unemployment rate

Total 

participants

Free and

reduced-price

participants

Full price

participants

Free and 

reduced-price as

percent of total

Periods of economic growth (falling unemployment rate)

1976 - 1979

Thousand students -948 -767 -181

Percent -3.7 -7.4 -1.2 -3.6

1984 - 1989

Thousand students -241 107 -349

Percent -1.0 0.9 -2.9 1.9

1993 - 2000

Thousand students -794 -746 -49

Percent -3.1 -5.4 -0.4 -2.2

2004 - 2007

Thousand students -1,452 -1,017 -435

Percent -5.0 -6.0 -3.6 -1.0

Periods of economic decline (rising unemployment rate)

1980 - 1983

Thousand students -931 23 -954

Percent -3.6 0.3 -6.9 4.0

1990 - 1992

Thousand students 200 752 -552

Percent 0.8 6.4 -4.4 5.5

2001 - 2003

Thousand students 553 521 32

Percent 2.0 3.3 0.3 1.3

2008 - 2010

Thousand students 205 486 -280

Percent 0.7 2.6 -2.3 1.9

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on data from USDA Food and Nutrition Service and U.S. Department of Labor, 

Bureau of Labor Statistics.
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Appendix B, table 9

Estimated annual average change in School Breakfast Program (SBP) participation per 1-percentagepoint change in unemployment rate

Total 

participants

Free and

reduced-price

participants

Full price

participants

Free and 

reduced-price as

percent of total

Periods of economic growth (falling unemployment rate)

1976 - 1979

Thousand students -673 -578 -95

Percent -29.2 -30.4 -24.7 -1.0

1984 - 1989

Thousand students -93 -58 -35

Percent -2.6 -1.8 -8.8 0.8

1993 - 2000

Thousand students -776 -597 -179

Percent -13.0 -11.7 -21.4 1.3

2004 - 2007

Thousand students -1,159 -800 -359

Percent -12.8 -10.8 -21.7 1.9

Periods of economic decline (rising unemployment rate)

1980 - 1983

Thousand students 12 58 -47

Percent 0.7 2.3 -9.4 1.7

1990 - 1992

Thousand students 511 468 43

Percent 12.3 13.0 8.0 0.6

2001 - 2003

Thousand students 446 316 130

Percent 5.7 4.8 10.0 -0.8

2008 - 2010

Thousand students 291 302 -11

Percent 2.7 3.5 -0.5 0.7

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on data from USDA Food and Nutrition Service and U.S. Department of Labor, 

Bureau of Labor Statistics.
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Appendix B, table 10

Estimated annual average change in Child and Adult Care Food Program (CACFP) participation per 

1-percentage-point change in unemployment rate

Total 

participants

Free and

reduced-price

participants

Full price

participants

Free and 

reduced-price as

percent of total

Periods of economic growth (falling unemployment rate)

1976 - 1979

Thousand participants -101 -67 -34

Percent -22.6 -18.3 -52.1 4.0

1984 - 1989

Thousand participants -93 -76 -17

Percent -8.5 -8.3 -9.7 0.2

1993 - 2000

Thousand participants -266 -213 -53

Percent -12.4 -11.7 -15.8 0.6

2004 - 2007

Thousand participants -199 -119 -79

Percent -6.6 -4.8 -14.8 1.7

Periods of economic decline (rising unemployment rate)

1980 - 1983

Thousand participants 75 70 5

Percent 10.6 12.5 11.0 1.5

1990 - 1992

Thousand participants 200 182 18

Percent 13.3 14.4 7.6 1.0

2001 - 2003

Thousand participants 106.8 79.8 27.0

Percent 3.9 3.5 5.9 -0.4

2008 - 2010

Thousand participants 28.0 27.8 0.2

Percent 0.9 1.1 0.0 0.2

Years shown are fiscal years.

Source: USDA Economic Research Service calculations based on data from USDA Food and Nutrition Service and U.S. Department of Labor, 

Bureau of Labor Statistics.
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Appendix C—Child and Adult Care Food 

Program (CACFP) Total Participation

There have been three distinct phases of caseload growth in CACFP, distinguished by changes in program legislation. The first phase, from 1976 to 

1988, represents the expansion of a new program, with total participation 

increasing an average 9.8 percent (68,000 participants) per year. Prior 

to 1976, participation in the then-pilot program was targeted exclusively 

to center-based child care in poor areas (Hamilton et al., 2002). In 1975 

legislation (P.L. 94-105), child care homes were allowed to participate 

in the program, and a three-level reimbursement structure was enacted 

based on the family income of the children receiving care, modeled after 

the National School Lunch Program. The Child Nutrition Amendments of 

1978 (P.L. 95-627) permanently authorized the program. With the goal of 

increasing participation, the amendments also replaced the three-level reimbursement structure in child care homes with a single reimbursement rate 

for all participants at a rate slightly below the free-meal reimbursement rate 

in child care centers. As a result of eliminating the means test for day care 

homes, more homes serving higher income children (those from families 

with incomes above 185 percent of the poverty guideline) participated in 

the program. Increased demand for child care also may have contributed 

to the program’s growth during this period, as the labor force participation rate of mothers with children under 6 years of age increased from 40.1 

percent in 1976 to 56.1 percent in 1988 (U.S. Department of Labor, 2008).

A second phase of more rapid growth (in terms of the number of participants) 

from 1989 to 1996 may have been influenced by three successive legislative 

changes to the program (U.S. Department of Agriculture, 2011c). First, the 

Older Americans Act of 1987 (P.L. 100-175) authorized the participation of 

eligible adult day care centers; second, the Hunger Prevention Act of 1988 

(P.L. 100-435) permitted an additional meal or snack for children in child 

care centers at least 8 hours per day; and, most important, the Child Nutrition 

and WIC Reauthorization Act of 1989 (P.L. 101-147) provided funds to 

expand family day care homes into low-income or rural areas, among other 

changes. During this period, there was once again a substantial increase in 

labor force participation by women with children under age 6: from 56.7 

percent in 1989 to 62.3 percent in 1996 (U.S. Department of Labor, 2008). As 

a result, total participation increased an average 8.5 percent (143,500 participants) per year during this phase.

Caseload growth in the third phase from 1997 to 2010 slowed down (in terms 

of the number of participants), back to that of the first phase. It began to 

slow after enactment of the Personal Responsibility and Work Opportunities 

Reconciliation Act of 1996 (PRWORA), which refocused the family child 

care component of the CACFP on low-income children by implementing a 

two-tiered reimbursement structure and lowering the maximum number of 

daily meals and snacks reimbursable in child care centers from four to three 

(U.S. Department of Agriculture, 2011c). Homes located in low-income areas 

or operated by persons with incomes at or below 185 percent of the Federal 

poverty guidelines were designated as Tier 1, and the meal reimbursement rates for Tier 1 homes were comparable to the rates that existed for all 

CACFP homes before the PRWORA. Tier 2 homes—family child care homes 
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that did not meet the low-income criteria—received lower reimbursements, 

although the providers could be reimbursed at Tier 1 rates for children in 

their care whose family incomes were at or below 185 percent of the poverty 

guideline. The new rate structure took effect July 1, 1997, and the number of 

day care homes has decreased steadily since that time. However, the number 

of children in day care centers continued to increase, and overall participation in the CACFP grew by an average 2.5 percent (72,000 participants) per 

year from 1997 to 2010. The annual average change in the number of participants was similar to that in the first growth phase and half the number of the 

second growth phase.1 1During the third phase, the labor 

force participation rate of mothers with 

children under 6 decreased slightly, from 

65 percent in 1997 to 63.5 percent in 

2007 (U.S. Department of Labor, 2008).