The Effect of Means-Tested Transfers on Work: Evidence from Quasi-Randomly Assigned SNAP Caseworkers
A recent study challenges the common belief that income support programs like SNAP reduce employment, finding that for individuals with a work history, receiving SNAP benefits can actually increase long-term employment.
Using administrative data and an examiner design, the paper assesses the labor supply effects of SNAP on new applicants.
It finds that most working-age applicants were not employed before applying, suggesting external barriers to work rather than SNAP-induced dependency. Among those who were previously employed, receiving SNAP led to a short-term decrease in employment, likely as an income-smoothing response to financial shocks, but employment and earnings rebounded in the long term. The findings challenge claims that SNAP disincentivizes work and suggest it functions as financial insurance rather than a deterrent to labor force participation.
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