Work Incentives and the Food Stamp Program
19th July 2010
We use the cross-county introduction of the program in the 1960s and 1970s to estimate the impact of the program on the extensive and intensive margins of labor supply, earnings, and family cash income. Consistent with theory, we find modest reductions in employment and hours worked when food stamps are introduced. The results are larger for single-parent families.
In other words, people who got Food Stamps worked less. Welfare payments have that effect.