USDA Study Shows Decline in Food Stamps

July 11, 2000

A new USDA study shows participation in the Food Stamp Program has experienced an unprecedented decline since 1994. Average monthly participation peaked at 27.5 million that year, then declined to 18.2 million last year.

Beyond the effects of a strong economy and welfare reform, a substantial part of the dramatic decline in food stamp participation remains unexplained, according to the study. If economic conditions mainly are responsible for the recent decline, participation should rebound if the economy enters a recession. But if changes in social welfare programs are responsible, participation should remain low as long as current policies remain in place.

The study finds that about 35% of the caseload decline can be attributed to a strong economy. About 12% is associated with program reforms, including those mandated by welfare reform legislation in 1996. However, the impacts of welfare reform on program participation is more mixed and difficult to interpret than the effects of economic conditions, the study points out.

The 1996 legislation restricted the eligibility of legal immigrants and able-bodied adults without dependents. It also restructured the cash welfare system in wash that may reduce participation.

The study can be access on the Internet at http://www.ers.usda.gov/epubs/pdf/fanrr7/.