Contract No.: FNS-03-030-TMN / 43-3198-3-3724 MPR Reference No.: 6044-510 Trends in Food Stamp Program Participation Rates: 2000 to 2006 Final Report June 2008 Kari Wolkwitz Submitted to: Submitted by: U.S. Department of Agriculture Mathematica Policy Research, Inc. Food and Nutrition Service 600 Maryland Avenue, S.W., Suite 550 3101 Park Center Drive Washington, DC 20024-2512 Room 1014 Telephone: (202) 484-9220 Alexandria, VA 22302 Facsimile: (202) 863-1763 Project Officer: Project Director: Jenny Genser Carole Trippe The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual’s income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communications of program information (Braille, large point, audiotape, etc.) should contact USDA’s TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of discrimination, write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, DC 20250-9410 or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer. ACKNOWLEDGMENTS This report was prepared by Kari Wolkwitz of Mathematica Policy Research, Inc. for the U.S. Department of Agriculture’s Food and Nutrition Service (FNS), Office of Research, Nutrition, and Analysis. Many individuals made important contributions to this report. The author thanks Karen Cunnyngham, Carole Trippe, Laura Castner, and Jackie Kauff for providing guidance and reviewing the report; Bruce Schechter and Joel Smith for providing programming support; and Jackie McGee for preparing the manuscript. The author also thanks Jenny Genser, Steven Carlson, Bob Dalrymple, and Michael DePiro of FNS for providing guidance and program information. This work was conducted under contract number FNS-03-030-TNN with FNS. An electronic version of this report is available at: http://www.fns.usda.gov/oane/MENU/Published/FSP/ participation.htm. Author: Kari Wolkwitz MPR Project Director: Carole Trippe MPR Project Number: 6044-510 FNS Project Officer: Jenny Genser FNS Contract Number: FNS-03-030-TNN / 43-3198-3-3724 CONTENTS Chapter Page EXECUTIVE SUMMARY...................................................................................................... xi INTRODUCTION......................................................................................................................1 SUMMARY OF ESTIMATED PARTICIPATION RATES FOR FY 2006.............................2 RECENT TRENDS IN PARTICIPATION RATES..................................................................3 PARTICIPATION RATES FOR SUBGROUPS FOR FY 2006...............................................3 TRENDS IN PARTICIPATION RATES FOR SUBGROUPS.................................................5 TRENDS IN BENEFIT RECEIPT RATES FOR FY 2006.......................................................6 FACTORS ASSOCIATED WITH CHANGES IN PARTICIPATION RATES.......................7 METHODOLOGY.....................................................................................................................8 REFERENCES.........................................................................................................................16 APPENDIX A: SELECTED INDIVIDUAL AND HOUSEHOLD PARTICIPATION RATES AND BENEFIT RECEIPT RATES IN FY 2006 .....................................................................................................17 APPENDIX B: DETAILED PARTICIPATION RATES IN FY 2006...............................21 APPENDIX C: CHANGES IN INDIVIDUAL FSP PARTICIPATION RATES, 1988 TO 2006 ............................................................................................35 APPENDIX D: METHODOLOGY ....................................................................................39 APPENDIX E: SAMPLING ERROR OF PARTICIPATION RATE ESTIMATES.........67 APPENDIX F: ECONOMIC AND POLICY INFLUENCES ON THE FOOD STAMP PROGRAM .................................................................................73 APPENDIX G: CHANGES IN THE MARCH CPS OVER TIME ....................................87 APPENDIX H: FSP ELIGIBILITY PARAMETERS.........................................................91 v TABLES Table Page 1 INDIVIDUAL AND HOUSEHOLD PARTICIPATION RATES AND BENEFIT RECEIPT RATES, FISCAL YEAR 2006.......................................................................9 2 MONTHLY NUMBER OF ELIGIBLE AND PARTICIPATING INDIVIDUALS, HOUSEHOLDS, AND BENEFITS, AND PARTICIPATION RATES, 1976 TO 2006 .................................................................................................10 3 FSP INDIVIDUAL PARTICIPATION RATES BY DEMOGRAPHIC CHARACTERISTICS, FY 2005 AND FY 2006 ..........................................................12 4 FSP INDIVIDUAL PARTICIPATION RATES BY ECONOMIC CHARACTERISTICS OF HOUSEHOLDS, FY 2005 AND FY 2006 ........................13 5 FSP PARTICIPATION RATES BY SELECTED CHARACTERISTICS, FY 2000 TO FY 2006....................................................................................................15 vii FIGURES Figure Page 1 TRENDS IN MONTHLY FSP PARTICIPATION RATES, 1976 TO 2006............... 11 2 INDIVIDUAL PARTICIPATION RATES BY SUBGROUP, FY 2006..................... 14 ix EXECUTIVE SUMMARY The Food Stamp Program (FSP) helps low-income individuals purchase food so that they can obtain a nutritious diet. One important measure of the program’s performance is its ability to reach its target population, as indicated by the proportion of people eligible for benefits who actually participate. Of the 37 million individuals who were eligible for food stamp benefits in an average month in 2006, 25 million individuals (67 percent) participated and over 12 million eligible individuals did not. While the FSP served 67 percent of all eligible individuals, it provided 83 percent of the food stamp benefits that all eligible individuals could receive, an increase of over 2 percentage points from 2005 and 18 percentage points from 2001. This is because the neediest individuals, who were eligible for higher benefits, participated at higher rates than other eligible individuals. Nationally, the participation rate among individuals increased by over 2 percentage points between 2005 and 2006, and by 13 points since 2002. Since 2002, States have increased outreach to low-income households, implemented program simplifications, and streamlined application processes to make it easier for eligible persons to apply for and receive food stamps. Most States have also reduced the amount of information that recipients must report during their certification period in order to maintain their eligibility and benefit levels, making it easier for low-income families to participate. Increases in participation rates occurred for almost every demographic and economic subgroup from 2005 to 2006, with particularly large increases in the participation rates of individuals in households with Social Security income, individuals qualifying for the maximum benefit for their household size, and individuals in households with no children. Rates remained relatively high for children, individuals in households with income below the poverty line, and for recipients of Temporary Assistance for Needy Families (TANF) or Supplemental Security Income (SSI); at least 84 percent of all eligible individuals within each of these groups participated in 2006. Among all household sizes, medium-sized households (3 or 4 members) had the highest participation rate, at around 81 percent in 2006, but small-sized households (1 or 2 members) had the largest rate increase from 2005 to 2006. The participation rate was less than 41 percent for eligible elderly adults, nondisabled childless adults subject to work registration, individuals living in households with incomes above the poverty line, and individuals in households with benefit levels less than half of the program maximum for their household size. Participation rates for individuals in households with earnings were also lower than average, at 57 percent, as were rates for individuals in households with no income, at 48 percent. While nondisabled childless adults subject to work registration had lower than average participation, the rate increased 5 points from 2005 to 39 percent. Noncitizens had decreasing participation rates through 2004, but the rate increased 10 points between 2004 and 2006 because the number of eligible noncitizens decreased during this time while the number of participating noncitizens continued to increase. The participation rate for citizen children living with noncitizen adults leveled off between 2005 and 2006, but was up 22 points overall since 2001. xi INTRODUCTION The Food Stamp Program (FSP) helps low-income individuals purchase food so that they can obtain a nutritious diet. The number of people who were eligible for FSP benefits under normal program rules1 and served in an average month by the FSP increased by over 2 percent from fiscal year (FY) 2005 to FY 2006, to 25 million. Most individuals are eligible for FSP benefits if their financial resources fall below certain income and asset thresholds. Not all of those who are eligible participate in the program, however. While some