The Effect of Means-Tested Transfers on Work: Evidence from Quasi-Randomly Assigned SNAP Caseworkers
Working Paper 31307
DOI 10.3386/w31307
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We comprehensively evaluate the effect of the Supplemental Nutrition Assistance Program (SNAP) on labor supply using newly linked data on SNAP applicants to administrative earnings records. Prior to applying for SNAP, earnings are trending down, but this trend is more severe for those granted SNAP than those denied. This motivates our novel IV approach based on assignment of applicants to caseworkers. Most applicants do not work before applying, and do not change work if granted SNAP. Those who work before applying appear to treat SNAP as insurance against negative shocks; they decrease work temporarily but work more in the longer-run.