Alleviating Poverty in the United States: The Critical Role of SNAP BenefitsWebsite Administrator
Economic Research Report No. (ERR-132) 30 pp, April 2012
What Is the Issue?
The Supplemental Nutrition Assistance Program (SNAP, formerly
called the Food Stamp Program) plays a vital role in the social
safety net in the United States, providing almost $72 billion in
benefits in 2011. An important measure of SNAP's effectiveness is
the extent to which the program reduces poverty. Evaluations of the
antipoverty effect of safety net programs often focus on the rate
of poverty. However, the poverty rate reflects only one aspect of
the antipoverty effect of a safety net program-whether or not
adding program benefits to a family's resources lifts them above
the poverty threshold. Two other measures, portraying the depth and
severity of poverty, capture how program benefits increase income
among the poor even if they do not lift them out of poverty. Both
measures provide richer information on how program benefits improve
the well-being of poor families, and the severity measure is
particularly sensitive to how program benefits increase well-being
among the poorest of the poor.
In this report, we calculated the rate, depth, and severity of
poverty, using the definition of family income in the official U.S.
poverty estimation (which does not include SNAP benefits). We then
estimated the reduction in the three poverty measures for the years
2000 through 2009, after including SNAP benefits in family income.
Our analysis focuses on a time period that includes the 2001 and
the 2007-2009 recessions as well as the implementation of
additional SNAP benefits through the 2009 stimulus legislation.
What Did the Study Find?
SNAP benefits have a relatively stronger effect on the depth and
severity of poverty than on the prevalence of poverty, and have a
particularly strong alleviative effect on poverty among children,
who experience significantly higher rates of poverty than the
Specifically, we found that:
• SNAP benefits led to an average annual decline of 4.4 percent in
the prevalence of poverty from 2000 to 2009, while the average
annual decline in the depth and severity of poverty was much larger
(10.3 and 13.2 percent, respectively).
• When SNAP benefits are included in family income, the average
annual decline from 2000 to 2009 in the depth of child poverty was
15.5 percent and the average annual decline in the severity of
child poverty was 21.3 percent.
• SNAP benefits reduced the depth and severity of poverty in both
metropolitan areas and nonmetropolitan areas, with somewhat greater
poverty reductions among individuals in nonmetropolitan areas.
SNAP's antipoverty effect was strongest in 2009, when benefit
increases were authorized by the American Recovery and Reinvestment
Act (ARRA), also known as the stimulus package. In 2009, SNAP
• Reduced the depth of child poverty by 20.9 percent and the
severity of child poverty by 27.5 percent.
• Ensured that the depth and severity of poverty in the overall
population increased only slightly from their 2008 levels despite
worsening economic conditions.
Our analysis shows that examining the basic poverty rate on its
own leads to an understatement of the role of SNAP benefits in the
reduction of poverty. Extending the analysis to include the
poverty-gap and squared-poverty-gap indices adds to our
understanding of the role SNAP plays in improving the welfare of
individuals in low-income households.
How Was the Study Conducted?
We used 10 years of cross-sectional data from the U.S. Census
Bureau's Annual Social and Economic Supplement to the Current
Population Survey (CPS), a nationally representative sample of
households that provides information on several different sources
of income, including in-kind benefits such as SNAP. SNAP benefits
are not included in the definition of family income used in the
official U.S. poverty calculation. We added the value of SNAP
benefits to family income, and compared several measures of annual
poverty with and without SNAP benefits. We used the CPS for this
analysis because it is the data source for official U.S. poverty
estimation. A limitation of the CPS is that SNAP participation and
benefits are under-reported in the survey, thus leading to an
underestimate of SNAP's effect on poverty.
To estimate the effect of SNAP on poverty, we examined how
supplementing income with SNAP benefits affects the headcount,
poverty-gap, and squared-poverty-gap indices. The headcount is
simply the proportion of persons living in poverty, or the poverty
rate. The poverty-gap index measures the depth of poverty and is
defined by the mean distance below the poverty threshold, where the
mean is formed over the entire population (the nonpoor are counted
as having zero poverty gap). The third measure is the
squared-poverty-gap index, which provides a measure of the severity
of poverty, and is defined as the mean of the squared proportionate