This report examines trends in FSP participation rates since 1994. It focuses on trends in the rates before and after welfare reform, and throughout much of the economic expansion of the 1990s. It also examines trends in participation rates among subgroups of the eligible population such as those with and without earnings, with and without children, and with and without welfare. It also looks at participation rates of aliens and able-bodied adults without children.
Over the last decade, food stamp participation rose more sharply than expected following the relatively short and mild recession in the early 1990s and fell more sharply than expected after 1994 during the sustained period of economic growth. Report language accompanying the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 2001 directed the Food and Nutrition Service to study the decline in participation in the Food Stamp Program.
This is the third report in a series of publications presenting estimates of the percentage of eligible persons, by state, who participate in the Food Stamp Program. This issue presents food stamp participation rates for states in September 1998 and the change between September 1994 and September 1998. This information can be used to assess recent trends in program performance and focus efforts for improvement.
A fundamental issue in the design of the Food Stamp Program (FSP) is the form benefits should take. Advocates of the current coupon system argue that coupons are a direct and inexpensive way to ensure that food stamp benefits are used to purchase food. Coupon advocates contend that, despite some evidence of fraud and benefit diversion under the current system, food stamps are used largely to purchase food. In addition, they contend that coupons give household food budgets some measure of protection against other demands on limited household resources. Advocates of cashing out the FSP argue that the current system limits the food-purchasing choices of recipients and places a stigma on participation. Moreover, they cite the cumbersome nature and cost of coupon issuance, transaction, and redemption.
A fundamental issue in the design of the Food Stamp Program is the form the benefits take. From the inception of pilot programs in the early 1960s to the contemporary program, the vehicle of choice has been the food stamp coupon, a voucher that can be redeemed for food at authorized retailers. For nearly that same period analyses have considered the relative merits of cash--or, in practice, checks--as an alternative. Advocates of the current coupon system argue that coupons are a direct and inexpensive way to ensure that food stamp benefits are used to purchase food, that the unauthorized use of food stamps is relatively limited despite some evidence of fraud and benefit diversion, and that coupons provide some measure of protection to food budgets from other demands on limited household resources. Advocates of cash benefits argue that the current system limits the purchasing choices of participants; places a stigma on participation; does not prevent the diversion of benefits (as evidenced by the existence of illegal trafficking); and entails excessive costs for coupon production, issuance, transaction, and redemption.