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8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Effects of Minimum Wages on
SNAP Enrollments and ExpenditureBy Rachel West and Michael Reich March 2014
WWWAMERICANPROGRESSO
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Effects of Minimum Wageson SNAP Enrollments andExpendituresBy Rachel West and Michael Reich March 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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1 Introduction and summary
5 Background
9 Methods and data
15 Results
19 Conclusion
20 About the authors and acknowledgments
21 References
23 Appendix A
25 Appendix B
33 Appendix C
38 Endnotes
Contents
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Introduction and summary | wwwamericanprogress
Introduction and summary
How do minimum wage policy increases affec enrollmens and expendiures on
means-esed public assisance programs In his repor we address his quesion
or he case o he Supplemenal Nuriion Assisance Program or SNAP
ormerly known as he ood samp program
By definiion governmen spending on a means-esed program should decline
as average earnings increase insoar as benefi levels all wih increased earnings
and insoar as he earnings increase makes some individuals ineligible orany benefis Boh o hese condiions are saisfied in he case o he effec o
minimum wages on SNAP benefis SNAP benefis decline 30 cens or every $1
increase in amily earnings and phase ou enirely a abou he ederal povery
level1 Low-wage workers are disproporionaely enrolled in SNAP A minimum
wage increase ha lifs many amilies ou o povery should hereore reduce
public expendiure on his program
Bu he relaionship may be more complex I a minimum wage increase reduces
employmen hereby adding o he number o unemployed he number o SNAP
recipiens could increase SNAP recipiens who are unemployed disabled or
reired will no be affeced by a minimum wage increase Conversely i many
SNAP recipiens have earnings ha already bring hem close o becoming
ineligible or he program a minimum wage increase may have a very small effec
on SNAP expendiures Te quaniaive effec o minimum wages on SNAP
spending is no sel-eviden I requires a causal analysis
In an era o hisorically low real ederal minimum wage raes rising income
inequaliy job-marke sagnaion and conenious debae abou governmen defici
spending he possibiliy ha a higher minimum wage may lead o increased orreduced public spending has grea relevance o he public and o policymakers
Tis repor presens an iniial empirical analysis o he effecs o minimum wage
policy on SNAP paricipaion and expendiures We do so by exploiing more han
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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2 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
wo decades o variaion in binding sae and ederal minimum wage changes in an
economeric ramework Our uure research will examine he effecs on SNAP
urher and apply an analogous ramework o wo oher public assisance spending
programs he Earned Income ax Credi and Medicaid
According o he finding in his repor a 10 percen increase in he minimum wagereduces SNAP enrollmen by beween 24 percen and 32 percen and reduces
program expendiures by an esimaed 19 percen aking ino accoun each
saersquos 2014 minimum wage level we apply hese resuls o he legislaive proposal
pu orward by Sen om Harkin (D-IA) and Rep George Miller (D-CA) o raise
he ederal minimum wage o $1010 per hour2 Our resuls imply ha he effecs
o he Harkin-Miller proposal on wage increases would reduce SNAP enrollmens
by beween 75 percen and 87 percen (31 million o 36 million persons) Te
oal anicipaed annual decrease in program expendiures is nearly $46 billion or
abou 6 percen o curren SNAP program expendiures
Harkin-Miller proposes o index minimum wage levels in subsequen years o he
consumer price index or CPI Te minimum wage would hen increase a he
same rae as SNAP benefi and eligibiliy levels which are also indexed o he CPI
Consequenly he savings over 10 years in 2014 dollars would be 10 imes he
one-year savings or a oal o approximaely $46 billion
Some o he reducion in SNAP program enrollmen and expendiures would
occur among workers making less han $1010 per hour991252hose whose pay would
be direcly increased by he minimum wage law Anoher par o he reducion
would occur among workers currenly earning beween $1010 and $1150 who
would also receive pay increases3
Alhough a large number o sudies have examined he impac o minimum
wage increases on earnings and employmen he impac o such minimum
wage policies on public assisance enrollmens and expendiures remains an
under-explored subjec in he economic lieraure Only a ew sudies discuss
he relaion beween he minimum wage and governmen ranser spending
much less atemp o ideniy he causal effec o one upon he oher Proessors
Marianne Paige Joanne Spez and Jane Millar find posiive effecs o minimum wage increases on welare caseloads as hey sae however heir resuls vary
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Introduction and summary | wwwamericanprogress
considerably wih differen sample periods and assumpions abou sae rends4
Proessors Marianne Biler and Hilary Hoynes discuss he imporance o SNAP
as a saey ne program bu hey do no examine is relaion o minimum wage
policy5 Research economis Sylvia Allegreto and her Universiy o Caliornia a
Berkeley colleagues show ha low-wage workers in general and as-ood workers
in paricular are much more likely o be SNAP recipiens han all workers6
Several sudies have examined he relaionship beween he minimum wage and
he Earned Income ax Credi or EIC Proessor David Neumark and William
Wascher a researcher a he Federal Reserve Board o Governors find ha a
higher minimum wage increases EIC benefis or amilies in deep povery
while reducing EIC benefis or some sub-groups7 Proessors David Lee and
Emmanuel Saez argue ha he minimum wage and EIC are complemenary
policies no subsiues8 Te Congressional Budge Office or CBO argues ha
a minimum wage increase will no have a subsanial effec on EIC spending9
while Proessor Jesse Rohsein examines wheher he posiive effec o he EICon emale labor supply has lowered wages10 While hese sudies are o ineres
he EIC is quie differen rom SNAP in having a subsanial phase-in period in
which EIC benefis increase as well as a long phase-ou period wih complee
phase-ou a an annual income o abou $48000 or a amily o our quie a bi
above he reach o he minimum wage11
Research by Proessor Arindraji Dube on he causal effec o he minimum wage
on amily povery represens he sudy mos relaed o he one a hand12 Dube finds
ha Harkin-Miller would raise abou 46 million non-elderly Americans above
he ederal povery level or FPL In conras when CBO uses a simple simulaion
mehod o address he same quesion hey find ha Harkin-Miller would raise
900000 people above FPL13 Te difference beween hese wo esimaes highlighs
he imporance o underaking a causal analysis Te mehods used in his paper are
in many respecs similar o Dubersquos Moreover since eligibiliy and benefi levels or
programs such as SNAP and Medicaid are ied o he ederal povery level Dubersquos
findings have direc implicaions or his sudy Noneheless his repor appears o
be he firs sudy o examine he effecs o he minimum wage on SNAP In uure
work we plan o underake similar analyses or he EIC and Medicaid
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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4 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te repor proceeds as ollows
bull Secion 1 provides background inormaion on he ederal minimum wage sae
minimum wages and he SNAP program
bullSecion 2 describes our mehods and daa
bull Secion 3 provides our main resuls including a simulaion o he effecs o a
Harkin-Miller minimum wage increase and a sae-by-sae analysis
bull Secion 4 presens our conclusions
Furher deails are provided in a series o appendices
Correction April 28 2014 Tis report incorrectly stated the potential reduction in
SNAP enrollment fom the Harkin-Miller proposal Te correct amount is 75 percentand 87 percent (31 million to 36 million persons) as stated in the reportrsquos tables
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
Background
The federal minimum wage
Te ederal minimum wage was las increased in July o 2009
nearly five years ago During he pas wo decades many saes
have passed legislaion fixing he minimum wage a a higher
level han he ederal minimum Te maps in Figure 1 show ha
while saes in every region o he Unied Saes have adoped
higher minimum wages hey are no disribued randomly bygeography As shown in he 2013 sudy ldquoCredible Research
Designs or Minimum Wage Sudiesrdquo by economiss Sylvia
Allegreto Arindraji Dube Michael Reich and Ben Zipperer
hese saes vary sysemaically rom he oher saes by a number
o characerisics ha affec low-wage employmen rends bu
which are no hemselves relaed o minimum wage policy14
Te nonrandom patern o minimum wage adopion has
imporan implicaions or obaining unbiased esimaes o
minimum wages on employmen In paricular naional panel
sudies ha use sae and ime fixed effec models991252such as
a 1992 sudy by David Neumark and William Wascher991252
spuriously esimae negaive employmen effecs Te reason
or his resul is uncovered using ess or pre-rends Tese
ess find ha low-wage employmen was already declining wo
years beore minimum wages were implemened By making a
saisically large number o local comparisons ha conrol or
heerogeneiy among saes and by ime eliminaes his pre-
rend For his reason we conduc similar ess or our SNAPoucomes and use model specificaions ha include local
comparisons as in he sudy cied above
FIGURE 1
High versus low minimum wage stat
from 1990 to 2012
Means and variances
More than $533
Average minimum wage over 1990ndash2012
Less than or equal to $533
More than $121
Minimum wage variance over 1990ndash2012
Less than or equal to $121
Notes State means and variances were calculated using annual stat
minimum wage data from 1990 to 2012 The shading on the maps
partitions the states into above- and below-median values
Source Sylvia Allegretto and others ldquoCredible Research Designs forMinimum Wage Studiesrdquo Working Paper 148-13 (Institute for Resear
on Labor and Employment 2013) available at httpwwwirleberkeleyeduworkingpapers148-13pdf
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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6 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te CBO recenly projeced ha in 2016 17 million workers will earn less han
he $1010 hourly wage proposed in he Harkin-Miller bill Furhermore he
CBO esimaes ha an addiional 8 million workers earned beween $1010 and
$1150 per hour and were also likely o experience a wage increase15
Supplemental Nutrition Assistance Program
We ocus our inquiry on SNAP Benefis under he program are enirely
ederally unded he program is adminisered by he US Deparmen o
Agriculure ogeher wih sae agencies which share in adminisraion
coss Spending on SNAP has grown in he pas decade reaching $78 bil lion
in 2011 wih SNAP enrollmen increasing o 45 million people abou one-
sevenh o he US populaion16 According o he CBO changes since 1990 in
SNAP spending and enrollmens are primarily he resul o cyclical economic
condiions noably changes in he unemploymen rae and changes in per capiaincome17 Te 2009 American Recovery and Reinvesmen Ac emporarily
increased SNAP benefi amouns by 136 percen as repored by he US
Deparmen o Agriculurersquos Food and Nuriion Service hese higher benefi
levels expired on November 1 201318 Te CBO esimaes ha abou wo-
hirds o he changes in SNAP expendiure are associaed wih changes in he
number o recipiens and one-hird wih changes in he benefis received when
recipiensrsquo incomes change19
In fiscal year 2014 SNAPrsquos maximum monhly benefis are $189 or a single
individual $497 or a amily o hree and $750 or a amily o five Benefis are
reduced by 30 cens per dollar received and phase ou enirely a gross monhly
household incomes o 130 percen o he ederal povery level $1245 or a
single individual $2116 or a amily o hree and $2987 or a amily o five
o deermine benefis SNAP also defines a ne monhly income concep and
ses benefis a 100 percen o he ederal povery level using his concep
Calculaion o ne monhly income can include cerain deducions rom
monhly gross income such as medical expenses and child care coss Alhough
saes are permited some laiude on wha deducions are allowed in pracice
hese vary by very small amouns Our saisical model akes accoun o sae-specific differences in benefis20
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Effects of Minimum Wageson SNAP Enrollments andExpendituresBy Rachel West and Michael Reich March 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 343
1 Introduction and summary
5 Background
9 Methods and data
15 Results
19 Conclusion
20 About the authors and acknowledgments
21 References
23 Appendix A
25 Appendix B
33 Appendix C
38 Endnotes
Contents
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Introduction and summary | wwwamericanprogress
Introduction and summary
How do minimum wage policy increases affec enrollmens and expendiures on
means-esed public assisance programs In his repor we address his quesion
or he case o he Supplemenal Nuriion Assisance Program or SNAP
ormerly known as he ood samp program
By definiion governmen spending on a means-esed program should decline
as average earnings increase insoar as benefi levels all wih increased earnings
and insoar as he earnings increase makes some individuals ineligible orany benefis Boh o hese condiions are saisfied in he case o he effec o
minimum wages on SNAP benefis SNAP benefis decline 30 cens or every $1
increase in amily earnings and phase ou enirely a abou he ederal povery
level1 Low-wage workers are disproporionaely enrolled in SNAP A minimum
wage increase ha lifs many amilies ou o povery should hereore reduce
public expendiure on his program
Bu he relaionship may be more complex I a minimum wage increase reduces
employmen hereby adding o he number o unemployed he number o SNAP
recipiens could increase SNAP recipiens who are unemployed disabled or
reired will no be affeced by a minimum wage increase Conversely i many
SNAP recipiens have earnings ha already bring hem close o becoming
ineligible or he program a minimum wage increase may have a very small effec
on SNAP expendiures Te quaniaive effec o minimum wages on SNAP
spending is no sel-eviden I requires a causal analysis
In an era o hisorically low real ederal minimum wage raes rising income
inequaliy job-marke sagnaion and conenious debae abou governmen defici
spending he possibiliy ha a higher minimum wage may lead o increased orreduced public spending has grea relevance o he public and o policymakers
Tis repor presens an iniial empirical analysis o he effecs o minimum wage
policy on SNAP paricipaion and expendiures We do so by exploiing more han
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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2 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
wo decades o variaion in binding sae and ederal minimum wage changes in an
economeric ramework Our uure research will examine he effecs on SNAP
urher and apply an analogous ramework o wo oher public assisance spending
programs he Earned Income ax Credi and Medicaid
According o he finding in his repor a 10 percen increase in he minimum wagereduces SNAP enrollmen by beween 24 percen and 32 percen and reduces
program expendiures by an esimaed 19 percen aking ino accoun each
saersquos 2014 minimum wage level we apply hese resuls o he legislaive proposal
pu orward by Sen om Harkin (D-IA) and Rep George Miller (D-CA) o raise
he ederal minimum wage o $1010 per hour2 Our resuls imply ha he effecs
o he Harkin-Miller proposal on wage increases would reduce SNAP enrollmens
by beween 75 percen and 87 percen (31 million o 36 million persons) Te
oal anicipaed annual decrease in program expendiures is nearly $46 billion or
abou 6 percen o curren SNAP program expendiures
Harkin-Miller proposes o index minimum wage levels in subsequen years o he
consumer price index or CPI Te minimum wage would hen increase a he
same rae as SNAP benefi and eligibiliy levels which are also indexed o he CPI
Consequenly he savings over 10 years in 2014 dollars would be 10 imes he
one-year savings or a oal o approximaely $46 billion
Some o he reducion in SNAP program enrollmen and expendiures would
occur among workers making less han $1010 per hour991252hose whose pay would
be direcly increased by he minimum wage law Anoher par o he reducion
would occur among workers currenly earning beween $1010 and $1150 who
would also receive pay increases3
Alhough a large number o sudies have examined he impac o minimum
wage increases on earnings and employmen he impac o such minimum
wage policies on public assisance enrollmens and expendiures remains an
under-explored subjec in he economic lieraure Only a ew sudies discuss
he relaion beween he minimum wage and governmen ranser spending
much less atemp o ideniy he causal effec o one upon he oher Proessors
Marianne Paige Joanne Spez and Jane Millar find posiive effecs o minimum wage increases on welare caseloads as hey sae however heir resuls vary
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Introduction and summary | wwwamericanprogress
considerably wih differen sample periods and assumpions abou sae rends4
Proessors Marianne Biler and Hilary Hoynes discuss he imporance o SNAP
as a saey ne program bu hey do no examine is relaion o minimum wage
policy5 Research economis Sylvia Allegreto and her Universiy o Caliornia a
Berkeley colleagues show ha low-wage workers in general and as-ood workers
in paricular are much more likely o be SNAP recipiens han all workers6
Several sudies have examined he relaionship beween he minimum wage and
he Earned Income ax Credi or EIC Proessor David Neumark and William
Wascher a researcher a he Federal Reserve Board o Governors find ha a
higher minimum wage increases EIC benefis or amilies in deep povery
while reducing EIC benefis or some sub-groups7 Proessors David Lee and
Emmanuel Saez argue ha he minimum wage and EIC are complemenary
policies no subsiues8 Te Congressional Budge Office or CBO argues ha
a minimum wage increase will no have a subsanial effec on EIC spending9
while Proessor Jesse Rohsein examines wheher he posiive effec o he EICon emale labor supply has lowered wages10 While hese sudies are o ineres
he EIC is quie differen rom SNAP in having a subsanial phase-in period in
which EIC benefis increase as well as a long phase-ou period wih complee
phase-ou a an annual income o abou $48000 or a amily o our quie a bi
above he reach o he minimum wage11
Research by Proessor Arindraji Dube on he causal effec o he minimum wage
on amily povery represens he sudy mos relaed o he one a hand12 Dube finds
ha Harkin-Miller would raise abou 46 million non-elderly Americans above
he ederal povery level or FPL In conras when CBO uses a simple simulaion
mehod o address he same quesion hey find ha Harkin-Miller would raise
900000 people above FPL13 Te difference beween hese wo esimaes highlighs
he imporance o underaking a causal analysis Te mehods used in his paper are
in many respecs similar o Dubersquos Moreover since eligibiliy and benefi levels or
programs such as SNAP and Medicaid are ied o he ederal povery level Dubersquos
findings have direc implicaions or his sudy Noneheless his repor appears o
be he firs sudy o examine he effecs o he minimum wage on SNAP In uure
work we plan o underake similar analyses or he EIC and Medicaid
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4 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te repor proceeds as ollows
bull Secion 1 provides background inormaion on he ederal minimum wage sae
minimum wages and he SNAP program
bullSecion 2 describes our mehods and daa
bull Secion 3 provides our main resuls including a simulaion o he effecs o a
Harkin-Miller minimum wage increase and a sae-by-sae analysis
bull Secion 4 presens our conclusions
Furher deails are provided in a series o appendices
Correction April 28 2014 Tis report incorrectly stated the potential reduction in
SNAP enrollment fom the Harkin-Miller proposal Te correct amount is 75 percentand 87 percent (31 million to 36 million persons) as stated in the reportrsquos tables
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Background | wwwamericanprogress
Background
The federal minimum wage
Te ederal minimum wage was las increased in July o 2009
nearly five years ago During he pas wo decades many saes
have passed legislaion fixing he minimum wage a a higher
level han he ederal minimum Te maps in Figure 1 show ha
while saes in every region o he Unied Saes have adoped
higher minimum wages hey are no disribued randomly bygeography As shown in he 2013 sudy ldquoCredible Research
Designs or Minimum Wage Sudiesrdquo by economiss Sylvia
Allegreto Arindraji Dube Michael Reich and Ben Zipperer
hese saes vary sysemaically rom he oher saes by a number
o characerisics ha affec low-wage employmen rends bu
which are no hemselves relaed o minimum wage policy14
Te nonrandom patern o minimum wage adopion has
imporan implicaions or obaining unbiased esimaes o
minimum wages on employmen In paricular naional panel
sudies ha use sae and ime fixed effec models991252such as
a 1992 sudy by David Neumark and William Wascher991252
spuriously esimae negaive employmen effecs Te reason
or his resul is uncovered using ess or pre-rends Tese
ess find ha low-wage employmen was already declining wo
years beore minimum wages were implemened By making a
saisically large number o local comparisons ha conrol or
heerogeneiy among saes and by ime eliminaes his pre-
rend For his reason we conduc similar ess or our SNAPoucomes and use model specificaions ha include local
comparisons as in he sudy cied above
FIGURE 1
High versus low minimum wage stat
from 1990 to 2012
Means and variances
More than $533
Average minimum wage over 1990ndash2012
Less than or equal to $533
More than $121
Minimum wage variance over 1990ndash2012
Less than or equal to $121
Notes State means and variances were calculated using annual stat
minimum wage data from 1990 to 2012 The shading on the maps
partitions the states into above- and below-median values
Source Sylvia Allegretto and others ldquoCredible Research Designs forMinimum Wage Studiesrdquo Working Paper 148-13 (Institute for Resear
on Labor and Employment 2013) available at httpwwwirleberkeleyeduworkingpapers148-13pdf
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6 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te CBO recenly projeced ha in 2016 17 million workers will earn less han
he $1010 hourly wage proposed in he Harkin-Miller bill Furhermore he
CBO esimaes ha an addiional 8 million workers earned beween $1010 and
$1150 per hour and were also likely o experience a wage increase15
Supplemental Nutrition Assistance Program
We ocus our inquiry on SNAP Benefis under he program are enirely
ederally unded he program is adminisered by he US Deparmen o
Agriculure ogeher wih sae agencies which share in adminisraion
coss Spending on SNAP has grown in he pas decade reaching $78 bil lion
in 2011 wih SNAP enrollmen increasing o 45 million people abou one-
sevenh o he US populaion16 According o he CBO changes since 1990 in
SNAP spending and enrollmens are primarily he resul o cyclical economic
condiions noably changes in he unemploymen rae and changes in per capiaincome17 Te 2009 American Recovery and Reinvesmen Ac emporarily
increased SNAP benefi amouns by 136 percen as repored by he US
Deparmen o Agriculurersquos Food and Nuriion Service hese higher benefi
levels expired on November 1 201318 Te CBO esimaes ha abou wo-
hirds o he changes in SNAP expendiure are associaed wih changes in he
number o recipiens and one-hird wih changes in he benefis received when
recipiensrsquo incomes change19
In fiscal year 2014 SNAPrsquos maximum monhly benefis are $189 or a single
individual $497 or a amily o hree and $750 or a amily o five Benefis are
reduced by 30 cens per dollar received and phase ou enirely a gross monhly
household incomes o 130 percen o he ederal povery level $1245 or a
single individual $2116 or a amily o hree and $2987 or a amily o five
o deermine benefis SNAP also defines a ne monhly income concep and
ses benefis a 100 percen o he ederal povery level using his concep
Calculaion o ne monhly income can include cerain deducions rom
monhly gross income such as medical expenses and child care coss Alhough
saes are permited some laiude on wha deducions are allowed in pracice
hese vary by very small amouns Our saisical model akes accoun o sae-specific differences in benefis20
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1843
Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 2643
Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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1 Introduction and summary
5 Background
9 Methods and data
15 Results
19 Conclusion
20 About the authors and acknowledgments
21 References
23 Appendix A
25 Appendix B
33 Appendix C
38 Endnotes
Contents
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Introduction and summary | wwwamericanprogress
Introduction and summary
How do minimum wage policy increases affec enrollmens and expendiures on
means-esed public assisance programs In his repor we address his quesion
or he case o he Supplemenal Nuriion Assisance Program or SNAP
ormerly known as he ood samp program
By definiion governmen spending on a means-esed program should decline
as average earnings increase insoar as benefi levels all wih increased earnings
and insoar as he earnings increase makes some individuals ineligible orany benefis Boh o hese condiions are saisfied in he case o he effec o
minimum wages on SNAP benefis SNAP benefis decline 30 cens or every $1
increase in amily earnings and phase ou enirely a abou he ederal povery
level1 Low-wage workers are disproporionaely enrolled in SNAP A minimum
wage increase ha lifs many amilies ou o povery should hereore reduce
public expendiure on his program
Bu he relaionship may be more complex I a minimum wage increase reduces
employmen hereby adding o he number o unemployed he number o SNAP
recipiens could increase SNAP recipiens who are unemployed disabled or
reired will no be affeced by a minimum wage increase Conversely i many
SNAP recipiens have earnings ha already bring hem close o becoming
ineligible or he program a minimum wage increase may have a very small effec
on SNAP expendiures Te quaniaive effec o minimum wages on SNAP
spending is no sel-eviden I requires a causal analysis
In an era o hisorically low real ederal minimum wage raes rising income
inequaliy job-marke sagnaion and conenious debae abou governmen defici
spending he possibiliy ha a higher minimum wage may lead o increased orreduced public spending has grea relevance o he public and o policymakers
Tis repor presens an iniial empirical analysis o he effecs o minimum wage
policy on SNAP paricipaion and expendiures We do so by exploiing more han
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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2 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
wo decades o variaion in binding sae and ederal minimum wage changes in an
economeric ramework Our uure research will examine he effecs on SNAP
urher and apply an analogous ramework o wo oher public assisance spending
programs he Earned Income ax Credi and Medicaid
According o he finding in his repor a 10 percen increase in he minimum wagereduces SNAP enrollmen by beween 24 percen and 32 percen and reduces
program expendiures by an esimaed 19 percen aking ino accoun each
saersquos 2014 minimum wage level we apply hese resuls o he legislaive proposal
pu orward by Sen om Harkin (D-IA) and Rep George Miller (D-CA) o raise
he ederal minimum wage o $1010 per hour2 Our resuls imply ha he effecs
o he Harkin-Miller proposal on wage increases would reduce SNAP enrollmens
by beween 75 percen and 87 percen (31 million o 36 million persons) Te
oal anicipaed annual decrease in program expendiures is nearly $46 billion or
abou 6 percen o curren SNAP program expendiures
Harkin-Miller proposes o index minimum wage levels in subsequen years o he
consumer price index or CPI Te minimum wage would hen increase a he
same rae as SNAP benefi and eligibiliy levels which are also indexed o he CPI
Consequenly he savings over 10 years in 2014 dollars would be 10 imes he
one-year savings or a oal o approximaely $46 billion
Some o he reducion in SNAP program enrollmen and expendiures would
occur among workers making less han $1010 per hour991252hose whose pay would
be direcly increased by he minimum wage law Anoher par o he reducion
would occur among workers currenly earning beween $1010 and $1150 who
would also receive pay increases3
Alhough a large number o sudies have examined he impac o minimum
wage increases on earnings and employmen he impac o such minimum
wage policies on public assisance enrollmens and expendiures remains an
under-explored subjec in he economic lieraure Only a ew sudies discuss
he relaion beween he minimum wage and governmen ranser spending
much less atemp o ideniy he causal effec o one upon he oher Proessors
Marianne Paige Joanne Spez and Jane Millar find posiive effecs o minimum wage increases on welare caseloads as hey sae however heir resuls vary
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Introduction and summary | wwwamericanprogress
considerably wih differen sample periods and assumpions abou sae rends4
Proessors Marianne Biler and Hilary Hoynes discuss he imporance o SNAP
as a saey ne program bu hey do no examine is relaion o minimum wage
policy5 Research economis Sylvia Allegreto and her Universiy o Caliornia a
Berkeley colleagues show ha low-wage workers in general and as-ood workers
in paricular are much more likely o be SNAP recipiens han all workers6
Several sudies have examined he relaionship beween he minimum wage and
he Earned Income ax Credi or EIC Proessor David Neumark and William
Wascher a researcher a he Federal Reserve Board o Governors find ha a
higher minimum wage increases EIC benefis or amilies in deep povery
while reducing EIC benefis or some sub-groups7 Proessors David Lee and
Emmanuel Saez argue ha he minimum wage and EIC are complemenary
policies no subsiues8 Te Congressional Budge Office or CBO argues ha
a minimum wage increase will no have a subsanial effec on EIC spending9
while Proessor Jesse Rohsein examines wheher he posiive effec o he EICon emale labor supply has lowered wages10 While hese sudies are o ineres
he EIC is quie differen rom SNAP in having a subsanial phase-in period in
which EIC benefis increase as well as a long phase-ou period wih complee
phase-ou a an annual income o abou $48000 or a amily o our quie a bi
above he reach o he minimum wage11
Research by Proessor Arindraji Dube on he causal effec o he minimum wage
on amily povery represens he sudy mos relaed o he one a hand12 Dube finds
ha Harkin-Miller would raise abou 46 million non-elderly Americans above
he ederal povery level or FPL In conras when CBO uses a simple simulaion
mehod o address he same quesion hey find ha Harkin-Miller would raise
900000 people above FPL13 Te difference beween hese wo esimaes highlighs
he imporance o underaking a causal analysis Te mehods used in his paper are
in many respecs similar o Dubersquos Moreover since eligibiliy and benefi levels or
programs such as SNAP and Medicaid are ied o he ederal povery level Dubersquos
findings have direc implicaions or his sudy Noneheless his repor appears o
be he firs sudy o examine he effecs o he minimum wage on SNAP In uure
work we plan o underake similar analyses or he EIC and Medicaid
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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4 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te repor proceeds as ollows
bull Secion 1 provides background inormaion on he ederal minimum wage sae
minimum wages and he SNAP program
bullSecion 2 describes our mehods and daa
bull Secion 3 provides our main resuls including a simulaion o he effecs o a
Harkin-Miller minimum wage increase and a sae-by-sae analysis
bull Secion 4 presens our conclusions
Furher deails are provided in a series o appendices
Correction April 28 2014 Tis report incorrectly stated the potential reduction in
SNAP enrollment fom the Harkin-Miller proposal Te correct amount is 75 percentand 87 percent (31 million to 36 million persons) as stated in the reportrsquos tables
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
Background
The federal minimum wage
Te ederal minimum wage was las increased in July o 2009
nearly five years ago During he pas wo decades many saes
have passed legislaion fixing he minimum wage a a higher
level han he ederal minimum Te maps in Figure 1 show ha
while saes in every region o he Unied Saes have adoped
higher minimum wages hey are no disribued randomly bygeography As shown in he 2013 sudy ldquoCredible Research
Designs or Minimum Wage Sudiesrdquo by economiss Sylvia
Allegreto Arindraji Dube Michael Reich and Ben Zipperer
hese saes vary sysemaically rom he oher saes by a number
o characerisics ha affec low-wage employmen rends bu
which are no hemselves relaed o minimum wage policy14
Te nonrandom patern o minimum wage adopion has
imporan implicaions or obaining unbiased esimaes o
minimum wages on employmen In paricular naional panel
sudies ha use sae and ime fixed effec models991252such as
a 1992 sudy by David Neumark and William Wascher991252
spuriously esimae negaive employmen effecs Te reason
or his resul is uncovered using ess or pre-rends Tese
ess find ha low-wage employmen was already declining wo
years beore minimum wages were implemened By making a
saisically large number o local comparisons ha conrol or
heerogeneiy among saes and by ime eliminaes his pre-
rend For his reason we conduc similar ess or our SNAPoucomes and use model specificaions ha include local
comparisons as in he sudy cied above
FIGURE 1
High versus low minimum wage stat
from 1990 to 2012
Means and variances
More than $533
Average minimum wage over 1990ndash2012
Less than or equal to $533
More than $121
Minimum wage variance over 1990ndash2012
Less than or equal to $121
Notes State means and variances were calculated using annual stat
minimum wage data from 1990 to 2012 The shading on the maps
partitions the states into above- and below-median values
Source Sylvia Allegretto and others ldquoCredible Research Designs forMinimum Wage Studiesrdquo Working Paper 148-13 (Institute for Resear
on Labor and Employment 2013) available at httpwwwirleberkeleyeduworkingpapers148-13pdf
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6 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te CBO recenly projeced ha in 2016 17 million workers will earn less han
he $1010 hourly wage proposed in he Harkin-Miller bill Furhermore he
CBO esimaes ha an addiional 8 million workers earned beween $1010 and
$1150 per hour and were also likely o experience a wage increase15
Supplemental Nutrition Assistance Program
We ocus our inquiry on SNAP Benefis under he program are enirely
ederally unded he program is adminisered by he US Deparmen o
Agriculure ogeher wih sae agencies which share in adminisraion
coss Spending on SNAP has grown in he pas decade reaching $78 bil lion
in 2011 wih SNAP enrollmen increasing o 45 million people abou one-
sevenh o he US populaion16 According o he CBO changes since 1990 in
SNAP spending and enrollmens are primarily he resul o cyclical economic
condiions noably changes in he unemploymen rae and changes in per capiaincome17 Te 2009 American Recovery and Reinvesmen Ac emporarily
increased SNAP benefi amouns by 136 percen as repored by he US
Deparmen o Agriculurersquos Food and Nuriion Service hese higher benefi
levels expired on November 1 201318 Te CBO esimaes ha abou wo-
hirds o he changes in SNAP expendiure are associaed wih changes in he
number o recipiens and one-hird wih changes in he benefis received when
recipiensrsquo incomes change19
In fiscal year 2014 SNAPrsquos maximum monhly benefis are $189 or a single
individual $497 or a amily o hree and $750 or a amily o five Benefis are
reduced by 30 cens per dollar received and phase ou enirely a gross monhly
household incomes o 130 percen o he ederal povery level $1245 or a
single individual $2116 or a amily o hree and $2987 or a amily o five
o deermine benefis SNAP also defines a ne monhly income concep and
ses benefis a 100 percen o he ederal povery level using his concep
Calculaion o ne monhly income can include cerain deducions rom
monhly gross income such as medical expenses and child care coss Alhough
saes are permited some laiude on wha deducions are allowed in pracice
hese vary by very small amouns Our saisical model akes accoun o sae-specific differences in benefis20
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Introduction and summary | wwwamericanprogress
Introduction and summary
How do minimum wage policy increases affec enrollmens and expendiures on
means-esed public assisance programs In his repor we address his quesion
or he case o he Supplemenal Nuriion Assisance Program or SNAP
ormerly known as he ood samp program
By definiion governmen spending on a means-esed program should decline
as average earnings increase insoar as benefi levels all wih increased earnings
and insoar as he earnings increase makes some individuals ineligible orany benefis Boh o hese condiions are saisfied in he case o he effec o
minimum wages on SNAP benefis SNAP benefis decline 30 cens or every $1
increase in amily earnings and phase ou enirely a abou he ederal povery
level1 Low-wage workers are disproporionaely enrolled in SNAP A minimum
wage increase ha lifs many amilies ou o povery should hereore reduce
public expendiure on his program
Bu he relaionship may be more complex I a minimum wage increase reduces
employmen hereby adding o he number o unemployed he number o SNAP
recipiens could increase SNAP recipiens who are unemployed disabled or
reired will no be affeced by a minimum wage increase Conversely i many
SNAP recipiens have earnings ha already bring hem close o becoming
ineligible or he program a minimum wage increase may have a very small effec
on SNAP expendiures Te quaniaive effec o minimum wages on SNAP
spending is no sel-eviden I requires a causal analysis
In an era o hisorically low real ederal minimum wage raes rising income
inequaliy job-marke sagnaion and conenious debae abou governmen defici
spending he possibiliy ha a higher minimum wage may lead o increased orreduced public spending has grea relevance o he public and o policymakers
Tis repor presens an iniial empirical analysis o he effecs o minimum wage
policy on SNAP paricipaion and expendiures We do so by exploiing more han
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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2 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
wo decades o variaion in binding sae and ederal minimum wage changes in an
economeric ramework Our uure research will examine he effecs on SNAP
urher and apply an analogous ramework o wo oher public assisance spending
programs he Earned Income ax Credi and Medicaid
According o he finding in his repor a 10 percen increase in he minimum wagereduces SNAP enrollmen by beween 24 percen and 32 percen and reduces
program expendiures by an esimaed 19 percen aking ino accoun each
saersquos 2014 minimum wage level we apply hese resuls o he legislaive proposal
pu orward by Sen om Harkin (D-IA) and Rep George Miller (D-CA) o raise
he ederal minimum wage o $1010 per hour2 Our resuls imply ha he effecs
o he Harkin-Miller proposal on wage increases would reduce SNAP enrollmens
by beween 75 percen and 87 percen (31 million o 36 million persons) Te
oal anicipaed annual decrease in program expendiures is nearly $46 billion or
abou 6 percen o curren SNAP program expendiures
Harkin-Miller proposes o index minimum wage levels in subsequen years o he
consumer price index or CPI Te minimum wage would hen increase a he
same rae as SNAP benefi and eligibiliy levels which are also indexed o he CPI
Consequenly he savings over 10 years in 2014 dollars would be 10 imes he
one-year savings or a oal o approximaely $46 billion
Some o he reducion in SNAP program enrollmen and expendiures would
occur among workers making less han $1010 per hour991252hose whose pay would
be direcly increased by he minimum wage law Anoher par o he reducion
would occur among workers currenly earning beween $1010 and $1150 who
would also receive pay increases3
Alhough a large number o sudies have examined he impac o minimum
wage increases on earnings and employmen he impac o such minimum
wage policies on public assisance enrollmens and expendiures remains an
under-explored subjec in he economic lieraure Only a ew sudies discuss
he relaion beween he minimum wage and governmen ranser spending
much less atemp o ideniy he causal effec o one upon he oher Proessors
Marianne Paige Joanne Spez and Jane Millar find posiive effecs o minimum wage increases on welare caseloads as hey sae however heir resuls vary
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Introduction and summary | wwwamericanprogress
considerably wih differen sample periods and assumpions abou sae rends4
Proessors Marianne Biler and Hilary Hoynes discuss he imporance o SNAP
as a saey ne program bu hey do no examine is relaion o minimum wage
policy5 Research economis Sylvia Allegreto and her Universiy o Caliornia a
Berkeley colleagues show ha low-wage workers in general and as-ood workers
in paricular are much more likely o be SNAP recipiens han all workers6
Several sudies have examined he relaionship beween he minimum wage and
he Earned Income ax Credi or EIC Proessor David Neumark and William
Wascher a researcher a he Federal Reserve Board o Governors find ha a
higher minimum wage increases EIC benefis or amilies in deep povery
while reducing EIC benefis or some sub-groups7 Proessors David Lee and
Emmanuel Saez argue ha he minimum wage and EIC are complemenary
policies no subsiues8 Te Congressional Budge Office or CBO argues ha
a minimum wage increase will no have a subsanial effec on EIC spending9
while Proessor Jesse Rohsein examines wheher he posiive effec o he EICon emale labor supply has lowered wages10 While hese sudies are o ineres
he EIC is quie differen rom SNAP in having a subsanial phase-in period in
which EIC benefis increase as well as a long phase-ou period wih complee
phase-ou a an annual income o abou $48000 or a amily o our quie a bi
above he reach o he minimum wage11
Research by Proessor Arindraji Dube on he causal effec o he minimum wage
on amily povery represens he sudy mos relaed o he one a hand12 Dube finds
ha Harkin-Miller would raise abou 46 million non-elderly Americans above
he ederal povery level or FPL In conras when CBO uses a simple simulaion
mehod o address he same quesion hey find ha Harkin-Miller would raise
900000 people above FPL13 Te difference beween hese wo esimaes highlighs
he imporance o underaking a causal analysis Te mehods used in his paper are
in many respecs similar o Dubersquos Moreover since eligibiliy and benefi levels or
programs such as SNAP and Medicaid are ied o he ederal povery level Dubersquos
findings have direc implicaions or his sudy Noneheless his repor appears o
be he firs sudy o examine he effecs o he minimum wage on SNAP In uure
work we plan o underake similar analyses or he EIC and Medicaid
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4 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te repor proceeds as ollows
bull Secion 1 provides background inormaion on he ederal minimum wage sae
minimum wages and he SNAP program
bullSecion 2 describes our mehods and daa
bull Secion 3 provides our main resuls including a simulaion o he effecs o a
Harkin-Miller minimum wage increase and a sae-by-sae analysis
bull Secion 4 presens our conclusions
Furher deails are provided in a series o appendices
Correction April 28 2014 Tis report incorrectly stated the potential reduction in
SNAP enrollment fom the Harkin-Miller proposal Te correct amount is 75 percentand 87 percent (31 million to 36 million persons) as stated in the reportrsquos tables
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Background | wwwamericanprogress
Background
The federal minimum wage
Te ederal minimum wage was las increased in July o 2009
nearly five years ago During he pas wo decades many saes
have passed legislaion fixing he minimum wage a a higher
level han he ederal minimum Te maps in Figure 1 show ha
while saes in every region o he Unied Saes have adoped
higher minimum wages hey are no disribued randomly bygeography As shown in he 2013 sudy ldquoCredible Research
Designs or Minimum Wage Sudiesrdquo by economiss Sylvia
Allegreto Arindraji Dube Michael Reich and Ben Zipperer
hese saes vary sysemaically rom he oher saes by a number
o characerisics ha affec low-wage employmen rends bu
which are no hemselves relaed o minimum wage policy14
Te nonrandom patern o minimum wage adopion has
imporan implicaions or obaining unbiased esimaes o
minimum wages on employmen In paricular naional panel
sudies ha use sae and ime fixed effec models991252such as
a 1992 sudy by David Neumark and William Wascher991252
spuriously esimae negaive employmen effecs Te reason
or his resul is uncovered using ess or pre-rends Tese
ess find ha low-wage employmen was already declining wo
years beore minimum wages were implemened By making a
saisically large number o local comparisons ha conrol or
heerogeneiy among saes and by ime eliminaes his pre-
rend For his reason we conduc similar ess or our SNAPoucomes and use model specificaions ha include local
comparisons as in he sudy cied above
FIGURE 1
High versus low minimum wage stat
from 1990 to 2012
Means and variances
More than $533
Average minimum wage over 1990ndash2012
Less than or equal to $533
More than $121
Minimum wage variance over 1990ndash2012
Less than or equal to $121
Notes State means and variances were calculated using annual stat
minimum wage data from 1990 to 2012 The shading on the maps
partitions the states into above- and below-median values
Source Sylvia Allegretto and others ldquoCredible Research Designs forMinimum Wage Studiesrdquo Working Paper 148-13 (Institute for Resear
on Labor and Employment 2013) available at httpwwwirleberkeleyeduworkingpapers148-13pdf
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6 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te CBO recenly projeced ha in 2016 17 million workers will earn less han
he $1010 hourly wage proposed in he Harkin-Miller bill Furhermore he
CBO esimaes ha an addiional 8 million workers earned beween $1010 and
$1150 per hour and were also likely o experience a wage increase15
Supplemental Nutrition Assistance Program
We ocus our inquiry on SNAP Benefis under he program are enirely
ederally unded he program is adminisered by he US Deparmen o
Agriculure ogeher wih sae agencies which share in adminisraion
coss Spending on SNAP has grown in he pas decade reaching $78 bil lion
in 2011 wih SNAP enrollmen increasing o 45 million people abou one-
sevenh o he US populaion16 According o he CBO changes since 1990 in
SNAP spending and enrollmens are primarily he resul o cyclical economic
condiions noably changes in he unemploymen rae and changes in per capiaincome17 Te 2009 American Recovery and Reinvesmen Ac emporarily
increased SNAP benefi amouns by 136 percen as repored by he US
Deparmen o Agriculurersquos Food and Nuriion Service hese higher benefi
levels expired on November 1 201318 Te CBO esimaes ha abou wo-
hirds o he changes in SNAP expendiure are associaed wih changes in he
number o recipiens and one-hird wih changes in he benefis received when
recipiensrsquo incomes change19
In fiscal year 2014 SNAPrsquos maximum monhly benefis are $189 or a single
individual $497 or a amily o hree and $750 or a amily o five Benefis are
reduced by 30 cens per dollar received and phase ou enirely a gross monhly
household incomes o 130 percen o he ederal povery level $1245 or a
single individual $2116 or a amily o hree and $2987 or a amily o five
o deermine benefis SNAP also defines a ne monhly income concep and
ses benefis a 100 percen o he ederal povery level using his concep
Calculaion o ne monhly income can include cerain deducions rom
monhly gross income such as medical expenses and child care coss Alhough
saes are permited some laiude on wha deducions are allowed in pracice
hese vary by very small amouns Our saisical model akes accoun o sae-specific differences in benefis20
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1843
Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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2 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
wo decades o variaion in binding sae and ederal minimum wage changes in an
economeric ramework Our uure research will examine he effecs on SNAP
urher and apply an analogous ramework o wo oher public assisance spending
programs he Earned Income ax Credi and Medicaid
According o he finding in his repor a 10 percen increase in he minimum wagereduces SNAP enrollmen by beween 24 percen and 32 percen and reduces
program expendiures by an esimaed 19 percen aking ino accoun each
saersquos 2014 minimum wage level we apply hese resuls o he legislaive proposal
pu orward by Sen om Harkin (D-IA) and Rep George Miller (D-CA) o raise
he ederal minimum wage o $1010 per hour2 Our resuls imply ha he effecs
o he Harkin-Miller proposal on wage increases would reduce SNAP enrollmens
by beween 75 percen and 87 percen (31 million o 36 million persons) Te
oal anicipaed annual decrease in program expendiures is nearly $46 billion or
abou 6 percen o curren SNAP program expendiures
Harkin-Miller proposes o index minimum wage levels in subsequen years o he
consumer price index or CPI Te minimum wage would hen increase a he
same rae as SNAP benefi and eligibiliy levels which are also indexed o he CPI
Consequenly he savings over 10 years in 2014 dollars would be 10 imes he
one-year savings or a oal o approximaely $46 billion
Some o he reducion in SNAP program enrollmen and expendiures would
occur among workers making less han $1010 per hour991252hose whose pay would
be direcly increased by he minimum wage law Anoher par o he reducion
would occur among workers currenly earning beween $1010 and $1150 who
would also receive pay increases3
Alhough a large number o sudies have examined he impac o minimum
wage increases on earnings and employmen he impac o such minimum
wage policies on public assisance enrollmens and expendiures remains an
under-explored subjec in he economic lieraure Only a ew sudies discuss
he relaion beween he minimum wage and governmen ranser spending
much less atemp o ideniy he causal effec o one upon he oher Proessors
Marianne Paige Joanne Spez and Jane Millar find posiive effecs o minimum wage increases on welare caseloads as hey sae however heir resuls vary
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Introduction and summary | wwwamericanprogress
considerably wih differen sample periods and assumpions abou sae rends4
Proessors Marianne Biler and Hilary Hoynes discuss he imporance o SNAP
as a saey ne program bu hey do no examine is relaion o minimum wage
policy5 Research economis Sylvia Allegreto and her Universiy o Caliornia a
Berkeley colleagues show ha low-wage workers in general and as-ood workers
in paricular are much more likely o be SNAP recipiens han all workers6
Several sudies have examined he relaionship beween he minimum wage and
he Earned Income ax Credi or EIC Proessor David Neumark and William
Wascher a researcher a he Federal Reserve Board o Governors find ha a
higher minimum wage increases EIC benefis or amilies in deep povery
while reducing EIC benefis or some sub-groups7 Proessors David Lee and
Emmanuel Saez argue ha he minimum wage and EIC are complemenary
policies no subsiues8 Te Congressional Budge Office or CBO argues ha
a minimum wage increase will no have a subsanial effec on EIC spending9
while Proessor Jesse Rohsein examines wheher he posiive effec o he EICon emale labor supply has lowered wages10 While hese sudies are o ineres
he EIC is quie differen rom SNAP in having a subsanial phase-in period in
which EIC benefis increase as well as a long phase-ou period wih complee
phase-ou a an annual income o abou $48000 or a amily o our quie a bi
above he reach o he minimum wage11
Research by Proessor Arindraji Dube on he causal effec o he minimum wage
on amily povery represens he sudy mos relaed o he one a hand12 Dube finds
ha Harkin-Miller would raise abou 46 million non-elderly Americans above
he ederal povery level or FPL In conras when CBO uses a simple simulaion
mehod o address he same quesion hey find ha Harkin-Miller would raise
900000 people above FPL13 Te difference beween hese wo esimaes highlighs
he imporance o underaking a causal analysis Te mehods used in his paper are
in many respecs similar o Dubersquos Moreover since eligibiliy and benefi levels or
programs such as SNAP and Medicaid are ied o he ederal povery level Dubersquos
findings have direc implicaions or his sudy Noneheless his repor appears o
be he firs sudy o examine he effecs o he minimum wage on SNAP In uure
work we plan o underake similar analyses or he EIC and Medicaid
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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4 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te repor proceeds as ollows
bull Secion 1 provides background inormaion on he ederal minimum wage sae
minimum wages and he SNAP program
bullSecion 2 describes our mehods and daa
bull Secion 3 provides our main resuls including a simulaion o he effecs o a
Harkin-Miller minimum wage increase and a sae-by-sae analysis
bull Secion 4 presens our conclusions
Furher deails are provided in a series o appendices
Correction April 28 2014 Tis report incorrectly stated the potential reduction in
SNAP enrollment fom the Harkin-Miller proposal Te correct amount is 75 percentand 87 percent (31 million to 36 million persons) as stated in the reportrsquos tables
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
Background
The federal minimum wage
Te ederal minimum wage was las increased in July o 2009
nearly five years ago During he pas wo decades many saes
have passed legislaion fixing he minimum wage a a higher
level han he ederal minimum Te maps in Figure 1 show ha
while saes in every region o he Unied Saes have adoped
higher minimum wages hey are no disribued randomly bygeography As shown in he 2013 sudy ldquoCredible Research
Designs or Minimum Wage Sudiesrdquo by economiss Sylvia
Allegreto Arindraji Dube Michael Reich and Ben Zipperer
hese saes vary sysemaically rom he oher saes by a number
o characerisics ha affec low-wage employmen rends bu
which are no hemselves relaed o minimum wage policy14
Te nonrandom patern o minimum wage adopion has
imporan implicaions or obaining unbiased esimaes o
minimum wages on employmen In paricular naional panel
sudies ha use sae and ime fixed effec models991252such as
a 1992 sudy by David Neumark and William Wascher991252
spuriously esimae negaive employmen effecs Te reason
or his resul is uncovered using ess or pre-rends Tese
ess find ha low-wage employmen was already declining wo
years beore minimum wages were implemened By making a
saisically large number o local comparisons ha conrol or
heerogeneiy among saes and by ime eliminaes his pre-
rend For his reason we conduc similar ess or our SNAPoucomes and use model specificaions ha include local
comparisons as in he sudy cied above
FIGURE 1
High versus low minimum wage stat
from 1990 to 2012
Means and variances
More than $533
Average minimum wage over 1990ndash2012
Less than or equal to $533
More than $121
Minimum wage variance over 1990ndash2012
Less than or equal to $121
Notes State means and variances were calculated using annual stat
minimum wage data from 1990 to 2012 The shading on the maps
partitions the states into above- and below-median values
Source Sylvia Allegretto and others ldquoCredible Research Designs forMinimum Wage Studiesrdquo Working Paper 148-13 (Institute for Resear
on Labor and Employment 2013) available at httpwwwirleberkeleyeduworkingpapers148-13pdf
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6 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te CBO recenly projeced ha in 2016 17 million workers will earn less han
he $1010 hourly wage proposed in he Harkin-Miller bill Furhermore he
CBO esimaes ha an addiional 8 million workers earned beween $1010 and
$1150 per hour and were also likely o experience a wage increase15
Supplemental Nutrition Assistance Program
We ocus our inquiry on SNAP Benefis under he program are enirely
ederally unded he program is adminisered by he US Deparmen o
Agriculure ogeher wih sae agencies which share in adminisraion
coss Spending on SNAP has grown in he pas decade reaching $78 bil lion
in 2011 wih SNAP enrollmen increasing o 45 million people abou one-
sevenh o he US populaion16 According o he CBO changes since 1990 in
SNAP spending and enrollmens are primarily he resul o cyclical economic
condiions noably changes in he unemploymen rae and changes in per capiaincome17 Te 2009 American Recovery and Reinvesmen Ac emporarily
increased SNAP benefi amouns by 136 percen as repored by he US
Deparmen o Agriculurersquos Food and Nuriion Service hese higher benefi
levels expired on November 1 201318 Te CBO esimaes ha abou wo-
hirds o he changes in SNAP expendiure are associaed wih changes in he
number o recipiens and one-hird wih changes in he benefis received when
recipiensrsquo incomes change19
In fiscal year 2014 SNAPrsquos maximum monhly benefis are $189 or a single
individual $497 or a amily o hree and $750 or a amily o five Benefis are
reduced by 30 cens per dollar received and phase ou enirely a gross monhly
household incomes o 130 percen o he ederal povery level $1245 or a
single individual $2116 or a amily o hree and $2987 or a amily o five
o deermine benefis SNAP also defines a ne monhly income concep and
ses benefis a 100 percen o he ederal povery level using his concep
Calculaion o ne monhly income can include cerain deducions rom
monhly gross income such as medical expenses and child care coss Alhough
saes are permited some laiude on wha deducions are allowed in pracice
hese vary by very small amouns Our saisical model akes accoun o sae-specific differences in benefis20
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Introduction and summary | wwwamericanprogress
considerably wih differen sample periods and assumpions abou sae rends4
Proessors Marianne Biler and Hilary Hoynes discuss he imporance o SNAP
as a saey ne program bu hey do no examine is relaion o minimum wage
policy5 Research economis Sylvia Allegreto and her Universiy o Caliornia a
Berkeley colleagues show ha low-wage workers in general and as-ood workers
in paricular are much more likely o be SNAP recipiens han all workers6
Several sudies have examined he relaionship beween he minimum wage and
he Earned Income ax Credi or EIC Proessor David Neumark and William
Wascher a researcher a he Federal Reserve Board o Governors find ha a
higher minimum wage increases EIC benefis or amilies in deep povery
while reducing EIC benefis or some sub-groups7 Proessors David Lee and
Emmanuel Saez argue ha he minimum wage and EIC are complemenary
policies no subsiues8 Te Congressional Budge Office or CBO argues ha
a minimum wage increase will no have a subsanial effec on EIC spending9
while Proessor Jesse Rohsein examines wheher he posiive effec o he EICon emale labor supply has lowered wages10 While hese sudies are o ineres
he EIC is quie differen rom SNAP in having a subsanial phase-in period in
which EIC benefis increase as well as a long phase-ou period wih complee
phase-ou a an annual income o abou $48000 or a amily o our quie a bi
above he reach o he minimum wage11
Research by Proessor Arindraji Dube on he causal effec o he minimum wage
on amily povery represens he sudy mos relaed o he one a hand12 Dube finds
ha Harkin-Miller would raise abou 46 million non-elderly Americans above
he ederal povery level or FPL In conras when CBO uses a simple simulaion
mehod o address he same quesion hey find ha Harkin-Miller would raise
900000 people above FPL13 Te difference beween hese wo esimaes highlighs
he imporance o underaking a causal analysis Te mehods used in his paper are
in many respecs similar o Dubersquos Moreover since eligibiliy and benefi levels or
programs such as SNAP and Medicaid are ied o he ederal povery level Dubersquos
findings have direc implicaions or his sudy Noneheless his repor appears o
be he firs sudy o examine he effecs o he minimum wage on SNAP In uure
work we plan o underake similar analyses or he EIC and Medicaid
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4 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te repor proceeds as ollows
bull Secion 1 provides background inormaion on he ederal minimum wage sae
minimum wages and he SNAP program
bullSecion 2 describes our mehods and daa
bull Secion 3 provides our main resuls including a simulaion o he effecs o a
Harkin-Miller minimum wage increase and a sae-by-sae analysis
bull Secion 4 presens our conclusions
Furher deails are provided in a series o appendices
Correction April 28 2014 Tis report incorrectly stated the potential reduction in
SNAP enrollment fom the Harkin-Miller proposal Te correct amount is 75 percentand 87 percent (31 million to 36 million persons) as stated in the reportrsquos tables
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
Background
The federal minimum wage
Te ederal minimum wage was las increased in July o 2009
nearly five years ago During he pas wo decades many saes
have passed legislaion fixing he minimum wage a a higher
level han he ederal minimum Te maps in Figure 1 show ha
while saes in every region o he Unied Saes have adoped
higher minimum wages hey are no disribued randomly bygeography As shown in he 2013 sudy ldquoCredible Research
Designs or Minimum Wage Sudiesrdquo by economiss Sylvia
Allegreto Arindraji Dube Michael Reich and Ben Zipperer
hese saes vary sysemaically rom he oher saes by a number
o characerisics ha affec low-wage employmen rends bu
which are no hemselves relaed o minimum wage policy14
Te nonrandom patern o minimum wage adopion has
imporan implicaions or obaining unbiased esimaes o
minimum wages on employmen In paricular naional panel
sudies ha use sae and ime fixed effec models991252such as
a 1992 sudy by David Neumark and William Wascher991252
spuriously esimae negaive employmen effecs Te reason
or his resul is uncovered using ess or pre-rends Tese
ess find ha low-wage employmen was already declining wo
years beore minimum wages were implemened By making a
saisically large number o local comparisons ha conrol or
heerogeneiy among saes and by ime eliminaes his pre-
rend For his reason we conduc similar ess or our SNAPoucomes and use model specificaions ha include local
comparisons as in he sudy cied above
FIGURE 1
High versus low minimum wage stat
from 1990 to 2012
Means and variances
More than $533
Average minimum wage over 1990ndash2012
Less than or equal to $533
More than $121
Minimum wage variance over 1990ndash2012
Less than or equal to $121
Notes State means and variances were calculated using annual stat
minimum wage data from 1990 to 2012 The shading on the maps
partitions the states into above- and below-median values
Source Sylvia Allegretto and others ldquoCredible Research Designs forMinimum Wage Studiesrdquo Working Paper 148-13 (Institute for Resear
on Labor and Employment 2013) available at httpwwwirleberkeleyeduworkingpapers148-13pdf
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6 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te CBO recenly projeced ha in 2016 17 million workers will earn less han
he $1010 hourly wage proposed in he Harkin-Miller bill Furhermore he
CBO esimaes ha an addiional 8 million workers earned beween $1010 and
$1150 per hour and were also likely o experience a wage increase15
Supplemental Nutrition Assistance Program
We ocus our inquiry on SNAP Benefis under he program are enirely
ederally unded he program is adminisered by he US Deparmen o
Agriculure ogeher wih sae agencies which share in adminisraion
coss Spending on SNAP has grown in he pas decade reaching $78 bil lion
in 2011 wih SNAP enrollmen increasing o 45 million people abou one-
sevenh o he US populaion16 According o he CBO changes since 1990 in
SNAP spending and enrollmens are primarily he resul o cyclical economic
condiions noably changes in he unemploymen rae and changes in per capiaincome17 Te 2009 American Recovery and Reinvesmen Ac emporarily
increased SNAP benefi amouns by 136 percen as repored by he US
Deparmen o Agriculurersquos Food and Nuriion Service hese higher benefi
levels expired on November 1 201318 Te CBO esimaes ha abou wo-
hirds o he changes in SNAP expendiure are associaed wih changes in he
number o recipiens and one-hird wih changes in he benefis received when
recipiensrsquo incomes change19
In fiscal year 2014 SNAPrsquos maximum monhly benefis are $189 or a single
individual $497 or a amily o hree and $750 or a amily o five Benefis are
reduced by 30 cens per dollar received and phase ou enirely a gross monhly
household incomes o 130 percen o he ederal povery level $1245 or a
single individual $2116 or a amily o hree and $2987 or a amily o five
o deermine benefis SNAP also defines a ne monhly income concep and
ses benefis a 100 percen o he ederal povery level using his concep
Calculaion o ne monhly income can include cerain deducions rom
monhly gross income such as medical expenses and child care coss Alhough
saes are permited some laiude on wha deducions are allowed in pracice
hese vary by very small amouns Our saisical model akes accoun o sae-specific differences in benefis20
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1743
14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1843
Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 2643
Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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4 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te repor proceeds as ollows
bull Secion 1 provides background inormaion on he ederal minimum wage sae
minimum wages and he SNAP program
bullSecion 2 describes our mehods and daa
bull Secion 3 provides our main resuls including a simulaion o he effecs o a
Harkin-Miller minimum wage increase and a sae-by-sae analysis
bull Secion 4 presens our conclusions
Furher deails are provided in a series o appendices
Correction April 28 2014 Tis report incorrectly stated the potential reduction in
SNAP enrollment fom the Harkin-Miller proposal Te correct amount is 75 percentand 87 percent (31 million to 36 million persons) as stated in the reportrsquos tables
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
Background
The federal minimum wage
Te ederal minimum wage was las increased in July o 2009
nearly five years ago During he pas wo decades many saes
have passed legislaion fixing he minimum wage a a higher
level han he ederal minimum Te maps in Figure 1 show ha
while saes in every region o he Unied Saes have adoped
higher minimum wages hey are no disribued randomly bygeography As shown in he 2013 sudy ldquoCredible Research
Designs or Minimum Wage Sudiesrdquo by economiss Sylvia
Allegreto Arindraji Dube Michael Reich and Ben Zipperer
hese saes vary sysemaically rom he oher saes by a number
o characerisics ha affec low-wage employmen rends bu
which are no hemselves relaed o minimum wage policy14
Te nonrandom patern o minimum wage adopion has
imporan implicaions or obaining unbiased esimaes o
minimum wages on employmen In paricular naional panel
sudies ha use sae and ime fixed effec models991252such as
a 1992 sudy by David Neumark and William Wascher991252
spuriously esimae negaive employmen effecs Te reason
or his resul is uncovered using ess or pre-rends Tese
ess find ha low-wage employmen was already declining wo
years beore minimum wages were implemened By making a
saisically large number o local comparisons ha conrol or
heerogeneiy among saes and by ime eliminaes his pre-
rend For his reason we conduc similar ess or our SNAPoucomes and use model specificaions ha include local
comparisons as in he sudy cied above
FIGURE 1
High versus low minimum wage stat
from 1990 to 2012
Means and variances
More than $533
Average minimum wage over 1990ndash2012
Less than or equal to $533
More than $121
Minimum wage variance over 1990ndash2012
Less than or equal to $121
Notes State means and variances were calculated using annual stat
minimum wage data from 1990 to 2012 The shading on the maps
partitions the states into above- and below-median values
Source Sylvia Allegretto and others ldquoCredible Research Designs forMinimum Wage Studiesrdquo Working Paper 148-13 (Institute for Resear
on Labor and Employment 2013) available at httpwwwirleberkeleyeduworkingpapers148-13pdf
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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6 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te CBO recenly projeced ha in 2016 17 million workers will earn less han
he $1010 hourly wage proposed in he Harkin-Miller bill Furhermore he
CBO esimaes ha an addiional 8 million workers earned beween $1010 and
$1150 per hour and were also likely o experience a wage increase15
Supplemental Nutrition Assistance Program
We ocus our inquiry on SNAP Benefis under he program are enirely
ederally unded he program is adminisered by he US Deparmen o
Agriculure ogeher wih sae agencies which share in adminisraion
coss Spending on SNAP has grown in he pas decade reaching $78 bil lion
in 2011 wih SNAP enrollmen increasing o 45 million people abou one-
sevenh o he US populaion16 According o he CBO changes since 1990 in
SNAP spending and enrollmens are primarily he resul o cyclical economic
condiions noably changes in he unemploymen rae and changes in per capiaincome17 Te 2009 American Recovery and Reinvesmen Ac emporarily
increased SNAP benefi amouns by 136 percen as repored by he US
Deparmen o Agriculurersquos Food and Nuriion Service hese higher benefi
levels expired on November 1 201318 Te CBO esimaes ha abou wo-
hirds o he changes in SNAP expendiure are associaed wih changes in he
number o recipiens and one-hird wih changes in he benefis received when
recipiensrsquo incomes change19
In fiscal year 2014 SNAPrsquos maximum monhly benefis are $189 or a single
individual $497 or a amily o hree and $750 or a amily o five Benefis are
reduced by 30 cens per dollar received and phase ou enirely a gross monhly
household incomes o 130 percen o he ederal povery level $1245 or a
single individual $2116 or a amily o hree and $2987 or a amily o five
o deermine benefis SNAP also defines a ne monhly income concep and
ses benefis a 100 percen o he ederal povery level using his concep
Calculaion o ne monhly income can include cerain deducions rom
monhly gross income such as medical expenses and child care coss Alhough
saes are permited some laiude on wha deducions are allowed in pracice
hese vary by very small amouns Our saisical model akes accoun o sae-specific differences in benefis20
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
Background
The federal minimum wage
Te ederal minimum wage was las increased in July o 2009
nearly five years ago During he pas wo decades many saes
have passed legislaion fixing he minimum wage a a higher
level han he ederal minimum Te maps in Figure 1 show ha
while saes in every region o he Unied Saes have adoped
higher minimum wages hey are no disribued randomly bygeography As shown in he 2013 sudy ldquoCredible Research
Designs or Minimum Wage Sudiesrdquo by economiss Sylvia
Allegreto Arindraji Dube Michael Reich and Ben Zipperer
hese saes vary sysemaically rom he oher saes by a number
o characerisics ha affec low-wage employmen rends bu
which are no hemselves relaed o minimum wage policy14
Te nonrandom patern o minimum wage adopion has
imporan implicaions or obaining unbiased esimaes o
minimum wages on employmen In paricular naional panel
sudies ha use sae and ime fixed effec models991252such as
a 1992 sudy by David Neumark and William Wascher991252
spuriously esimae negaive employmen effecs Te reason
or his resul is uncovered using ess or pre-rends Tese
ess find ha low-wage employmen was already declining wo
years beore minimum wages were implemened By making a
saisically large number o local comparisons ha conrol or
heerogeneiy among saes and by ime eliminaes his pre-
rend For his reason we conduc similar ess or our SNAPoucomes and use model specificaions ha include local
comparisons as in he sudy cied above
FIGURE 1
High versus low minimum wage stat
from 1990 to 2012
Means and variances
More than $533
Average minimum wage over 1990ndash2012
Less than or equal to $533
More than $121
Minimum wage variance over 1990ndash2012
Less than or equal to $121
Notes State means and variances were calculated using annual stat
minimum wage data from 1990 to 2012 The shading on the maps
partitions the states into above- and below-median values
Source Sylvia Allegretto and others ldquoCredible Research Designs forMinimum Wage Studiesrdquo Working Paper 148-13 (Institute for Resear
on Labor and Employment 2013) available at httpwwwirleberkeleyeduworkingpapers148-13pdf
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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6 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te CBO recenly projeced ha in 2016 17 million workers will earn less han
he $1010 hourly wage proposed in he Harkin-Miller bill Furhermore he
CBO esimaes ha an addiional 8 million workers earned beween $1010 and
$1150 per hour and were also likely o experience a wage increase15
Supplemental Nutrition Assistance Program
We ocus our inquiry on SNAP Benefis under he program are enirely
ederally unded he program is adminisered by he US Deparmen o
Agriculure ogeher wih sae agencies which share in adminisraion
coss Spending on SNAP has grown in he pas decade reaching $78 bil lion
in 2011 wih SNAP enrollmen increasing o 45 million people abou one-
sevenh o he US populaion16 According o he CBO changes since 1990 in
SNAP spending and enrollmens are primarily he resul o cyclical economic
condiions noably changes in he unemploymen rae and changes in per capiaincome17 Te 2009 American Recovery and Reinvesmen Ac emporarily
increased SNAP benefi amouns by 136 percen as repored by he US
Deparmen o Agriculurersquos Food and Nuriion Service hese higher benefi
levels expired on November 1 201318 Te CBO esimaes ha abou wo-
hirds o he changes in SNAP expendiure are associaed wih changes in he
number o recipiens and one-hird wih changes in he benefis received when
recipiensrsquo incomes change19
In fiscal year 2014 SNAPrsquos maximum monhly benefis are $189 or a single
individual $497 or a amily o hree and $750 or a amily o five Benefis are
reduced by 30 cens per dollar received and phase ou enirely a gross monhly
household incomes o 130 percen o he ederal povery level $1245 or a
single individual $2116 or a amily o hree and $2987 or a amily o five
o deermine benefis SNAP also defines a ne monhly income concep and
ses benefis a 100 percen o he ederal povery level using his concep
Calculaion o ne monhly income can include cerain deducions rom
monhly gross income such as medical expenses and child care coss Alhough
saes are permited some laiude on wha deducions are allowed in pracice
hese vary by very small amouns Our saisical model akes accoun o sae-specific differences in benefis20
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1843
Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
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6 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
Te CBO recenly projeced ha in 2016 17 million workers will earn less han
he $1010 hourly wage proposed in he Harkin-Miller bill Furhermore he
CBO esimaes ha an addiional 8 million workers earned beween $1010 and
$1150 per hour and were also likely o experience a wage increase15
Supplemental Nutrition Assistance Program
We ocus our inquiry on SNAP Benefis under he program are enirely
ederally unded he program is adminisered by he US Deparmen o
Agriculure ogeher wih sae agencies which share in adminisraion
coss Spending on SNAP has grown in he pas decade reaching $78 bil lion
in 2011 wih SNAP enrollmen increasing o 45 million people abou one-
sevenh o he US populaion16 According o he CBO changes since 1990 in
SNAP spending and enrollmens are primarily he resul o cyclical economic
condiions noably changes in he unemploymen rae and changes in per capiaincome17 Te 2009 American Recovery and Reinvesmen Ac emporarily
increased SNAP benefi amouns by 136 percen as repored by he US
Deparmen o Agriculurersquos Food and Nuriion Service hese higher benefi
levels expired on November 1 201318 Te CBO esimaes ha abou wo-
hirds o he changes in SNAP expendiure are associaed wih changes in he
number o recipiens and one-hird wih changes in he benefis received when
recipiensrsquo incomes change19
In fiscal year 2014 SNAPrsquos maximum monhly benefis are $189 or a single
individual $497 or a amily o hree and $750 or a amily o five Benefis are
reduced by 30 cens per dollar received and phase ou enirely a gross monhly
household incomes o 130 percen o he ederal povery level $1245 or a
single individual $2116 or a amily o hree and $2987 or a amily o five
o deermine benefis SNAP also defines a ne monhly income concep and
ses benefis a 100 percen o he ederal povery level using his concep
Calculaion o ne monhly income can include cerain deducions rom
monhly gross income such as medical expenses and child care coss Alhough
saes are permited some laiude on wha deducions are allowed in pracice
hese vary by very small amouns Our saisical model akes accoun o sae-specific differences in benefis20
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Background | wwwamericanprogress
SNAP imposes an employmen or work-raining requiremen or able-bodied
prime-age aduls991252hose beween he ages o 18 and 50 and wihou disabiliies
or dependen children Such households can receive only hree monhs o benefis
in a hree-year period In recen years abou 85 percen o households receiving
benefis have incomes below he ederal povery level 49 percen have dependen
children 16 percen are age 60 or older 20 percen are disabled and 30 percenrepor some earned income21
A 2012 CBO repor also noes ha ake-up raes among eligible SNAP recipiens
average abou 70 percen wih much lower ake-up among elderly households
Te ake-up rae increases in harder economic imes I also increased when sigma
issues were reduced as SNAP debi cards replaced acual ood samps ake-up
is especially high among hose mos needy Adminisraive spending equaled 91
percen o he poenial spending ha would have occurred i all eligible recipiens
were enrolled Alhough some SNAP policy changes have occurred since 1990
mos were relaively minor and all were naional in scope Te 1996 welare reorm bill eliminaed SNAP eligibiliy or some legal immigrans limied he ime lengh
o eligibiliy or able-bodied childless aduls and reduced maximum benefis
Some o hese resricions were relaxed in 2002 and again in he American
Recovery and Reinvesmen Ac in 200922
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1243
Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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8 Center for American Progress | The Effects of M inim um Wages on SNAP Enro llments and Expenditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1243
Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogress
Methods and data
As previously menioned we exploi variaion in minimum wages by sae and ime
o examine heir causal effecs on SNAP enrollmens and expendiures o do so we
merge daa rom 1990 hrough 2012 drawn rom he Annual Social and Economic
Supplemen o he Curren Populaion Survey991252an annual Census Bureau survey
commonly known as he March CPS ha includes23 inormaion on SNAP
enrollmens a he amily level991252wih sae-level daa on minimum wages SNAP
expendiures populaion unemploymen raes and sae median income levels
o conrol or ime-varying heerogeneiy among saes our specificaions includeconrols or sae linear rends and effecs by Census division and ime We esimae
effecs a wo levels allowing or amily variaion and allowing only or sae-level
variaion We also employ a se o sandard demographic conrols such as amily size
and composiion and race and ehnic composiion
Distinguishing causation from correlation
How can we ensure ha our analysis does no pick up a spurious correlaion or
example he endency o more economically vibran saes o implemen higher
minimum wages Disinguishing correlaion and policy endogeneiy rom rue
causal effecs is he primary moivaion or economeric analysis In he ideal
experimen researchers would begin wih wo saes991252ha are alike in every
respec prior o he policy991252 and ldquoreardquo only one o hese saes wih a higher
minimum wage Tey would atemp o shield hese saes rom any influence ha
could obscure heir undersanding o he minimum wagersquos direc effec on SNAP
enrollmen Researchers o course canno conduc such experimens
We can however use saisical mehods o conrol simulaneously heindependen effecs on SNAP o sae unemploymen raes sae income levels
and common rajecories among saes wihin he same Census division By
ensuring similariy along hese dimensions we maximize he likelihood ha
SNAP aciviy in wo saes would have comparable oucomes in he absence
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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10 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
o a minimum wage policy change Tus i a new minimum wage policy were
implemened in one sae only he researchers could atribue all o he difference
hey observe in SNAP aciviy o he new minimum wage policy
In oher words we approximae he ideal experimen by using non-experimenal
saisical mehods Te desirable ldquopre-exising similariiesrdquo beween saes ha wehave defined above inorm our choice o conrol variables in a saisical seting
More precisely in our muliple regression models we use median amily income
he unemploymen rae he employmen-o-populaion raio and regional and
ime idenifiers o consruc an appropriae group o peers or each sae on he
eve o a policy change
Data description
wo daa ses include inormaion abou boh income and paricipaion inpublic programs Te Survey o Income and Program Paricipaion or SIPP
which is conduced in inermiten years has he advanage o ollowing he
same individuals over a period o ime In oher words i is a longiudinal daa
se I also has he advanage o conaining monhly daa However he sample
size o he SIPP is no sufficien or analyzing variaions in sae-level minimum
wages Te March CPS has he advanage o a much larger sample size and i is
conduced annually wihou any breaks in ime I has he disadvanage o being
a cross-secional daa se so we canno ollow he same individuals over ime991252
sricly speaking over more han one year On ne he March CPS is much more
suiable or our sudy We examine he empirical relaionship beween minimum
wage policy and ood samp aciviy a wo levels o aggregaion he amily level
and he sae level Family-level daa are drawn rom he March CPS
Te March CPS comprises responses rom he residens o 50000 o 60000
dwelling places surveyed per year and conains deailed inormaion on he
residensrsquo employmen and income including income rom ranser paymens
Te sample or our analysis comprises more han 128 million amily unis during
he period rom 1990 o 2012 (inclusive) Survey weighs allow us o analyze
SNAP paricipaion in a manner ha is represenaive o he US populaion alarge Over all years he share o amilies reporing ood samp receip in he
weighed March CPS sample is 91 percen Te enrollmen rae was a a low o 6
percen in he year 2000 In 2012 he mos recen year in our panel 133 percen
o amilies repored paricipaing in SNAP a some poin during he survey year
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
Te March CPS also collecs inormaion on he number o SNAP recipiens in
he household he number o monhs he household receives SNAP benefis
and he cash-equivalen value o he SNAP benefis received However he
value o SNAP benefis is severely underrepored among recipiens perhaps
because recipiens are unaware o he exac monhly cash-equivalen value o
benefis hey receive
Our firs empirical sraegy ocuses solely on SNAP enrollmen By using he
amily as he uni o analysis we are able o inser saisical conrols o accoun
or non-wage-relaed acors ha influence any paricular amilyrsquos likelihood o
program paricipaion wih he inenion o isolaing any differences in program
paricipaion ha are due purely o changes in wage policy Tis approach
idenifies he effecs o low-wage labor policy on he exernal margin991252ha is
he effec o he minimum wage on he likelihood ha a amily paricipaes in he
SNAP program a all991252as opposed o he inernal margin or how much SNAP
unding he amily would receive
Our second empirical ramework uses sae-level adminisraive daa Ta is
we aggregae he daa o obain a single daa poin or each saeyear back
o 1990 represening he mean o he oucome or he sae Te sae-level
esimaion serves as a robusness check on he amily-level resuls or SNAP
paricipaion Also using aggregaed daa allows us o esimae direcly he
causal effec o minimum wage changes on SNAP spending Tis is no possible
a he amily level as discussed above daa on cash-equivalen value o ood
samps or SNAP recipiens is very requenly no repored in he March CPS
and when i is repored he inormaion may be unreliable By conras he
Bureau o Economic Analysis publishes aggregae SNAP spending a he sae
level in is Naional Income and Produc Accoun or NIPA ables Tus
while we are unable o observe he heerogeneiy in he cash value o SNAP
or amilies in each sae we are able o calculae average SNAP spending
per residen in each sae per year Supporing covariaes include he annual
unemploymen and employmen daa rom he Bureau o Labor Saisics or
BLS and sae-level populaion series rom he iner-decennial census releases
Minimum wage daa are available rom he BLSrsquos wages and hours division For
sae minimum wage changes enaced a oher imes han he firs o he yearan average value or he year is used
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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12 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Family level model specifications
We firs examine he effec o he minimum wage on paricipaion in public
assisance programs For amily residing in sae and during year we esimae
an equaion o he ollowing orm
(1)
is a binary variable ha is se equal o 1 i a leas one member o amily
received ood samps during he survey year is a se o sae-level
characerisics including annual averages o he unemploymen rae he
employmen-o-populaion raio and he naural log o median amily income
is a vecor o amily atribues including indicaors or he race and marial saus
o he amily head size o he amily he presence o children and he presence oan adul male Sae fixed effecs are capured by o conrol or ime-varying
heerogeneiy our preerred model specificaion also includes year fixed effecs
ha vary by Census division ( ) and sae-level linear ime rends In
Appendix B we jusiy he inclusion o hese las wo erms We also compare he
resuls rom our preerred specificaion wih less sauraed specificaions
Te effec o ineres which is capured by is he expeced change in he
probabiliy o receiving SNAP benefis wih respec o a change in he (log o he)
binding minimum wage in sae during year We repor robus sandard errors
clusered a he sae level We esimae he parameers using linear regression
producing a linear probabiliy model Deails o he model selecion process are
covered in Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1843
Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 2543
22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Methods and data | wwwamericanprogresso
State-level model specifications
Te sae-level models are similarly specified For sae in year we assume ha
(2)
In his model is now eiher he SNAP enrollmen rae in sae during year
or he naural logarihm o per capia SNAP expendiures in sae during
year is once again a se o sae-level characerisics including he same
sae-level covariaes as in he amily regressions (annual average unemploymen
rae employmen-o-populaion raio naural log o median amily income)
wih he addiion o amily level characerisics averaged across he sae (average
amily size and he shares o populaion consiued by each o five racialehnicgroups) Sae fixed effecs are represened by As above our preerred model
specificaion includes year fixed effecs ha vary by Census division ( ) and
sae-level linear ime rends as elaboraed in Appendix B Te effec o
ineres is capured by
We esimae boh sae-level models (enrollmen and expendiures) using
ordinary leas squares regression Tus he inerpreaion o he coefficien is no
longer ha o a change in probabiliy as in he binary oucome models described
above Raher or he sae-level SNAP enrollmen model represens he
expeced change (in percenage poins) in he saersquos SNAP enrollmen rae ha
is due o a 1 percen change in he minimum wage For he SNAP expendiures
model is simply he elasiciy o SNAP spending wih respec o he minimum
wage991252ha is he percenage change in sae expendiures expeced o resul rom
a 1 percen change in ha saersquos minimum wage For urher deails on model
specificaion reer o Appendix B below
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1743
14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1843
Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 2643
Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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14 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 1843
Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
Results
Estimated minimum wage effects on SNAP enrollment and
expenditures
able 1 shows he esimaed parameer o ineres991252he coefficien o he
minimum wage or he preerred model o each ype Coefficiens on he
minimum wage variable are no direcly comparable across models because all
our models have a differen uncional orm o undersand and compare hese
esimaes we compue he change in SNAP aciviy prediced or a paricular wage scenario Te final column in able 1 answers he quesion Wha would be
he expeced change in SNAP aciviy in response o a 10 percen increase in he
minimum wage Te answer o his quesion varies wih he value o he inpu
parameers in he able we calculae he percenage decrease in enrollmen or
expendiures prediced or he average sae wih a minimum wage o $725 in
2014 Te sae-level SNAP expendiure model which is a consan-elasiciy
model conveys elasiciy inormaion direcly or he change in expendiures per
capia in he sae
TABLE 1
Comparison of national SNAP predictions for a 10 percent increase in the federal minimum wage
Model LevelRegression
type
Predicted outcome Coefficient of log
(minimum wage)
(Standard error)
Effect of a 10 percent in
in the minimum wage
VariableForm of
variable
Total
enrollment
Tot
expend
1 Family Linear
probability Enrollment Binary (enrolled=1)
-0042
(0008) -317 N
2
StateLinear regression
(ordinary least
squares)
Enrollment State enrollment rate (percent) -0031
(0012) -235 N
3 Expenditures Log (state expenditures per capita) -0190
(0103) NA -19
plt01 plt005 plt001Note Predicted changes are calculated for the average state with a minimum wage of $725 in 2014
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 2643
Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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16 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
According o his model a 10 percen increase in he minimum wage would resul
in a 19 percen reducion in SNAP expendiures Tis resul is reassuringly similar
o Dubersquos resul or povery reducion Te wo enrollmen models are much more
precisely esimaed han he expendiure model Te sae-level enrollmen model
finds ha a 10 percen minimum wage increase in a low-wage sae is associaed wih
a 235 percen decrease in SNAP enrollmens Te amily-level linear probabiliymodel predics a somewha greaer elasiciy or low minimum wage saes an
increase o 10 percen in he ederal minimum would resul in a 317 percen decline
in SNAP enrollmen24 Te differences in hese esimaes sem rom a number o
acors including difference in model uncional orm and daa used We rea his
range o elasiciy esimaes as an upper and lower bound on enrollmen impacs
Harkin-Miller bill National and state-level predicted impacts
Wha would be he prediced change or he SNAP program i he ederalminimum were raised o $1010 as proposed in he Harkin-Miller bill In order o
make his inerence we accoun or he ac ha no all saes are currenly subjec
o he ederal minimum wage a he beginning o 2014 21 saes mainained
higher minimum wages han $725 In hose saes an increase in he ederal
minimum wage may or may no be binding or employers in he sae depending
upon wheher he new ederal minimum exceeds he sae-level minimum Bu
regardless o wheher a minimum wage change is binding he impac on SNAP
aciviy will be lower in high minimum wage saes In order o accoun or his
properly we calculae sae by sae he percenage wage change ha would resul
rom he Harkin-Miller proposal and apply he parameers rom each o he hree
models above o compue he expeced decrease in SNAP aciviy or each sae
In his exercise we use saesrsquo curren (2014) minimum wage levels and assume
as a baseline he 2012 levels o SNAP enrollmen and expendiure as 2012 is he
mos recen year or which SNAP daa are available
able 10 and able 11 in Appendix C repor he esimaed effecs on SNAP
enrollmen and expendiures respecively or each sae under he Harkin-Miller
bill25 An increase o $1010 i enaced oday would represen beween a 393
percen wage increase in a $725 minimum wage sae and an 84 percen increasein Washingon sae which has he highes minimum wage in he naion a $932
as o January 201426 Slighly more han 56 percen o he decrease in expendiures
and abou 59 percen o he decrease in enrollmen would occur in saes wih
presen-day minimum wages o $725
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Results | wwwamericanprogresso
In 2012 hese saes were home o 46 percen o he American populaion
and accouned or a roughly equivalen percenage o oal naional SNAP
expendiures No surprisingly he larges enrollmen decreases come rom
populous saes wih very high SNAP enrollmen raes andor very low minimum
wages Te larges prediced enrollmen reducion991252beween 319000 individuals
and 362000 individuals991252would occur in exas which has a $725 minimum wage In Caliornia which has a 206 percen SNAP paricipaion rae and an $8
per hour minimum wage we anicipae SNAP enrollmen declines o 310000
persons o 371000 persons And in Florida which had a SNAP paricipaion rae
o 166 percen and a $793 minimum wage enrollmen could decline by beween
164000 individuals and 196000 individuals For he our saes ha ogeher
accouned or he greaes amoun o SNAP spending in 2012991252exas Caliornia
Florida and New York respecively991252he combined expendiure reducion rom
he Harkin-Miller bill is prediced o be $14 billion
able 2 summarizes he prediced declines in SNAP aciviy or he naion as a whole ha would resul rom he direc and indirec effecs o he Harkin-Miller
bill Enrollmen would all beween 31 million persons and 36 million persons
represening 75 percen o 87 percen o curren enrollmen Te anicipaed
reducion in program expendiures would be nearly $46 billion or 61 percen o
program expendiures
TABLE 2
Comparison of national SNAP predictions under the Harkin-Miller billrsquos $1010 minimum wage
Model
Enrollment
(persons)
Expenditures
(millions of dollars)
Current (2012) Predicted Change Current (2012) Predicted Chan
Family enrollment (linear probability)
41866195
45489339 -3623144
$74861
NA NA
State enrollment (ordinary least squares) 38745435 -3120759 NA NA
State expenditures (ordinary least squares) NA NA $70305 -$45
Note Calculations use 2014 state minimum wages and the most recent SNAP data from 2012 They assume that per-enrollee expenditures remain constant
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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18 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Tere are o course oher possibiliies or minimum wage legislaion able 3
shows he expeced SNAP changes or he Unied Saes under a variey o wage
scenarios calculaed using he sae-level models I saes were no able o se
heir minimum wages independenly such ha all saes were consrained by
he ederal minimum o $725 SNAP would be received by abou 514000 more
people across he Unied Saes a an addiional program cos o nearly hree-quarers o a billion dollars In conras he effecs o a higher minimum wage
proposal991252a ederal wage floor o $11 per hour991252would decrease enrollmen in
SNAP by more han 10 percen and decrease program coss by 83 percen
TABLE 3
Summary of par ticipation and expenditures under wage scenarios
If all states had
minimum wages of
Enrollment(persons)
Expenditures
(millions of dollars)
Predicted Change Predicted Change
Recent levels (2014) 41866195 $74861
$725 42380520 514326 $75604 $743
$800 41423919 -442276 $74209 -$652
$900 40148451 -1717744 $72350 -$2511
$1000 38872982 -2993212 $70490 -$4371
$1010 38745435 -3120759 $70305 -$4556
$1100 37597514 -4268681 $68631 -$6230
Note Calculations use state-level enrollment model coefficient
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Conclusion | wwwamericanprogresso
Conclusion
An exensive body o lieraure examines employmen effecs o he minimum
wage A much smaller se o sudies examines how he minimum wage affecs
povery and only a handul o papers examine he effecs o he minimum wage
on he EIC Our analysis is he firs o examine he effecs o he minimum
wage on SNAP
Our findings indicae ha increased earnings rom minimum wage changes do
reduce SNAP enrollmens and expendiures We esimae ha he Harkin-Miller bill would save axpayers nearly $46 billion per year equivalen o 61 percen
o SNAP expendiures in 2012 he las year or which daa are available Over a
10-year period he esimaed savings amoun o nearly $46 billion
Our repor is subjec o limiaions ha we expec o overcome in our uure
research Firs he findings do no ake ino accoun possible ineracions among
SNAP he EIC and Medicaid Te eligibiliy cuoffs among hese programs
are quie differen suggesing ha such ineracions may be minor Noneheless
he join effecs can only be deermined by urher research using a causal
model Second i would be useul o know he disribuion o SNAP reducions
along he wage disribuion Using he Congressional Budge Officersquos calculaions
o how much he oal dollar value o wage would increase under he Harkin-
Miller proposal our findings imply ha he decline in overall SNAP spending
equals abou 15 percen o he oal resuling increase in wages Te amoun and
disribuion o his offse are o considerable ineres Minimum wage beneficiaries
who come rom working amilies already well above he povery line would no
see any offse while hose who are currenly considerably below he povery line
will see larger offses Tese issues will also be a subjec or our uure research
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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20 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
About the authors
Rachel West is a maser o public policy candidae a he Goldman School
o Public Policy Universiy o Caliornia Berkeley Her research ocuses on
economic policy in he areas o low-wage labor and povery
Michael Reich is proessor o economics and direcor o he Insiue or
Research on Labor and Employmen a he Universiy o Caliornia a Berkeley
His research publicaions cover numerous areas o labor economics including
racial inequaliy labor marke segmenaion high-perormance workplaces
union-managemen cooperaion Japanese labor-managemen sysems living
wages and minimum wages He received his docorae in economics rom
Harvard Universiy
Acknowledgments
We are graeul o Sylvia Allegreto Arindraji Dube Bill Leser Jesse Rohsein
Daniel Tompson and Ben Zipperer or heir valuable suggesions
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References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 2643
Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3543
32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 2443
References | wwwamericanprogresso
References
Allegreto Sylvia and ohers 2013 ldquoFas Food Povery Wages Te Public Cos o Low-Wage Jobsin he Fas-Food Indusryrdquo Universiy o Caliornia Berkeley Cener or Labor Research andEducaion Available a htplaborcenerberkeleyedupubliccossas_ood_povery_wage
Allegreto Sylvia and ohers 2013 ldquoCredible Research Designs or Minimum Wage Sudiesrdquo
Working Paper 148-13 Universiy o Caliornia Berkeley Insiue or Research on Labor andEmploymen Available a htpwwwirleberkeleyeduworkingpapers148-13pd
Biler Marianne and Hilary Hoynes 2013 ldquo Te More Tings Change he More Tey Say heSame Te Saey Ne Living Arrangemens and Povery in he Grea Recessionrdquo Working Paper19449 Naional Bureau o Economic Research
Congressional Budge Office 2012 ldquoTe Supplemenal Nuriion Assisance Programrdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens04-19-SNAPpd
991252 991252 991252 2014 ldquoTe Effec o a Minimum-Wage Increase on Employmen and Family Incomerdquo Washingon Available a htpwwwcbogovsiesdeaulfilescbofilesatachmens44995-MinimumWagepd
Dube Arindraji 2013 rdquoMinimum Wages and he Disribuion o Family Incomerdquo Unpublished working paper Available a htpsdldropboxuserconencomu15038936Dube_ MinimumWagesFamilyIncomespd
991252 991252 991252 2014 ldquoTe Povery o Minimum Wage Facsrdquo Arindraji Dube Blog January 22 Availablea htparindubecom20140122he-povery-o-minimum-wage-acs
Lee David and Emmanuel Saez 2012 ldquoOpimal Minimum Wage Policy in Compeiive LaborMarkesrdquo Journal o Public Economics 96 (9) 739ndash749
Neumark David and William Wascher 1992 ldquoEmploymen Effecs o Minimum and Subminimum Wages Panel Daa on Sae Minimum Wage Lawsrdquo Industrial and Labor Relations Review 46 (1)
55ndash81
Neumark David and William Wascher 2011 ldquoDoes a Higher Minimum Wage Enhance heEffeciveness o he Earned Income ax Credirdquo Industrial and Labor Relations Review 64 (4)712ndash746
Page Marianne Joanne Spez and Jane Millar 2005 ldquoDoes he Minimum Wage Affec WelareCaseloadsrdquo Journal o Policy Analysis and Management 24 (2) 273ndash295
Rohsein Jesse 2010 ldquoIs he EIC as Good as an NI Condiional Cash ransers and ax
Incidencerdquo American Economic Journal Economic Policy 2 (1) 177ndash208
Wage and Hours Division 2014 ldquoMinimum Wage Laws in he Saes ndash January 1 2014rdquo USDeparmen o Labor (htpwwwdolgovwhdminwageamericahm [February 2014])
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 2543
22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 2643
Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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22 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix A | wwwamericanprogresso
Appendix A
Pre-trend falsification check
Recen minimum wage research27 highlighs a common flaw in previous sudies
ailure o veriy ha he oucome variable is ree o negaive pre-exising rends I
or example SNAP aciviy was already rending down in saes ha raised heir
minimum wages beore hese changes came ino effec our regression analysis could
(misakenly) atribue ha reducion o he minimum wage We check or such
pre-rends by inroducing variables ha represen he prior yearrsquos value or leads o
he minimum wage I he model esimaes he minimum wage o have an effec on
he oucome variable beore he wage change wen ino effec hen an unobservedacor no he minimum wage change caused he change in SNAP aciviy
We es he specificaions above or pre-rends by including a one-year lead in
all hree specificaions We find ha he lead erms are small posiive and no
saisically significan indicaing ha he concurren minimum wage991252no
he wage level in prior periods991252is driving he observed changes in SNAP
oucomes28 In paricular he coefficien (sandard error) on he lead erm in
our preerred amily-level enrollmen regression is 011 and no significan
while he coefficien and sandard error o he conemporaneous minimum
wage is unchanged In he sae-level preerred enrollmen regression he
coefficien o he lead erm is again small (07) and i is no significan Te
corresponding coefficien on he lead erm in he sae-level expendiure
regression is 16 and is no significan Te posiive poin esimaes on hese lead
erms resuls no only rule ou disoring negaive pre-rends Tey also sugges
ha our main resuls may underesimae he rue effecs
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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24 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
Appendix B
Model selection process
For boh he amily-level and sae-level models we es hree mehods o conrol
or unobserved geographic- and ime-varying characerisics as suggesed by he
minimum wage lieraure Firs we include only independen sae-specific fixed
effecs and year-specific fixed effecs Tis specificaion (specificaion 1) implicily
assumes ha amilies in any sae consiue an equally good saisical ldquoconrolrdquo
group or hose in any randomly chosen sae afer accouning or various
characerisics (median income and unemploymen rae among ohers) Similarly
simple ime fixed effecs assume ha amilies surveyed in any year can crediblyserve as a conrol group or amilies surveyed in every oher year o he sample
(1990 hrough 2012)
In oher words specificaion 1 assumes ha a saersquos immediae neighbor provides
no beter a couneracual or he effec o a minimum wage change han does a
sae across he counry We relax his resricive specificaion sequenially in wo
seps In specificaion 2 we replace simple year fixed effecs wih fixed effecs or
each Census divisionyear (capured as an addiional variable in he vecor By
using division-year effecs we remove he resricion ha amilies in each sae
are equally good saisical conrols or all oher amilies Raher we allow or he
possibiliy ha amilies in similar geographic regions (or example he Souh or
he Norheas) may be more similar o one anoher han amilies arher away
Finally in specificaion 3 we add sae-specific linear ime rends o he previous
specificaion Tus specificaion 3 is he mos rigorous model specificaion in ha
i allows or heerogeneiy along hree dimensions Ta is specificaion 3 allows
each sae o have is own ime-varying rends raher han imposing he resricion
ha saes evolve idenically over he 22 years in he sample
We begin building he heoreical specificaion above rom a se o simpleuncondiional models regression o SNAP aciviy (enrollmen or expendiures)
on he log o he minimum wage and a se o geographic- and ime-specific
effecs (specificaions 1 2 and 3 described above) As shown in ables 1ndash3 (or
specificaion 3) we hen add covariaes sequenially o hese models including
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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26 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
firs he vecor o amily-level conrols ollowed by each o several sae-level
covariaes in urn he unemploymen rae log o median-amily income and he
employmen-o-populaion raio Comparable resuls or specificaions 2 and 3
will be available in our orhcoming working paper
As expeced he simple uncondiional models indicae ha he relaionship beween he minimum wage and SNAP enrollmen i one exiss is a more complex
one influenced by oher acors In he uncondiional model he coefficien on he
variable o ineres991252he log o he minimum wage991252is small in magniude and no
saisically differen rom zero Once we accoun or he influence o labor marke
condiions and variaion in income levels on program paricipaion (by including
unemploymen rae and median-amily income conrol variables respecively)
he effec o he minimum wage on SNAP enrollmen is precisely esimaed Te
coefficien o he log minimum wage is slighly higher (-0042) in he amily-level
analysis han he coefficien (-031) in he sae-level analysis Te level o precision
is also higher in he amily-level analysis Tis is o be expeced when using 124million observaions compared o 1127
Te second dimension o model choice concerns he effec specificaion ables
7ndash9 compare he primary coefficiens o ineres or he SNAP enrollmen and
expendiure models For boh he enrollmen models he effec sizes are smalles
or specificaion 1 larges or specificaion 2 and inermediae beween hese wo
in specificaion 3 Recall ha Specificaion 3 conains sae-specific linear ime
rends in addiion o he census divisionyear conrols included in specificaion
2 In he amily-level enrollmen model he sandard error o he minimum wage
coefficien is smaller han in he oher wo specificaions Sandard errors on he
oher variables are much smaller in specificaions 2 and 3 han in specificaion
1 On he basis o coefficien significance (join and individual) specificaions 2
and 3 are sricly preerred in boh enrollmen models o specificaion 1 which
conains only sae and year fixed effecs
A concern wih specificaions 2 and 3 is ha rend conrols such as sae linear
rends may incorrecly absorb some o he delayed impac o a minimum wage
When we es his issue by including lagged minimum wages we do no find ha
delayed effecs are significan Anoher concern is ha more sauraed modelsuse less o he saisical variaion which could reduce he saisical power o
he resuls However he sandard errors or our more sauraed models are no
higher and are lower in some cases han or he less sauraed models Overall
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3943
36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4043
Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3043
Appendix B | wwwamericanprogresso
his evidence suppors our use o he sauraed model as he preerred model
specificaion Moreover Dubersquos 2013 sudy shows ha more sauraed models
perorm beter han models wih jus sae and ime fixed effecs
Te esimaed enrollmen regressions a boh he amily and sae levels show large
and saisically significan coefficiens Te esimaed minimum wage effec in heexpendiures regressions991252or which we have only sae-level daa991252is also large
and saisically significan
We do no use weighed regression or he sae-level models preerring o keep
analysis o he ldquoreamenrdquo (ha is o say a minimum wage change) appropriae
o he average sae raher han he average amily or individual I insead our
primary ineres were he impac o a minimum wage change on he average amily
or he average individual we migh choose o designae he number o amilies
in each sae or he sae populaion respecively as analyic weighs in order o
obain a coefficien beter suied or such inerence
TABLE 4
SNAP enrollment
Family-level linear probability
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0048 -0047 -0040 -0043 -0042
(0013) (0013) (001) (0008) (0009)
Unemployment rate (100) 0505 0420 0280
(0083) (0086) (0082)
Log median income -0057 -0039
(0011) (0011)
Employment-to-population ratio -0239
(0038)
N 1242022 1242022 1242022 1242022 1242022
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcome variable is binary and equal to one if a family is enrolledin SNAP All models include state fixed effects Census division x-year fixed effects and state-specific linear time trends All specifications except 3a include additional
controls for family size race and marital status of the family head presence of children and presence of an adult maleSource Annual data from the March Current Population Survey for 1990 to 2012 estimation includes Current Population Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3143
28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3243
Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3343
30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3443
Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3543
32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3843
Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3943
36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4043
Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3143
28 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 5
SNAP enrollment
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0028 -0024 -0026 -0031 -0031
(0014) (0013) (0013) (0012) (0012)
Unemployment rate (100) 0625 0466 0320 0339
(0087) (0088) (0085) (0083)
Log median income -0090 -0065 -0061
(0013) (0013) (0013)
Employment-to-population ratio -0282 -0248
(0037) (0038)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate All models include state fixed effects Census division x-year fixedeffects and state-specific linear time trends
Source Annual data from the March Current Population Survey for 1990 to 2012
TABLE 6
SNAP expenditures
State-level linear regression
(3a) (3b) (3c) (3d) (3e)
Log minimum wage -0181 -0149 -0156 -0153 -0190
(011) (0103) (0102) (0103) (0103)
Unemployment rate (100) 4587 4152 4232 4313
(0622) (0621) (0633) (0628)
Log median income -0246 -0261 -0294
(0075) (0078) (0078)
Employment-to-population ratio 0155 0244
(0237) (024)
N 1127 1127 1127 1127 1127
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAP expenditures per capita for 1990 to 2012 All models include state
fixed effects Census division x-year fixed effects and state-specific linear time trends
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3243
Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3343
30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3443
Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3543
32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3743
34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3843
Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3943
36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3243
Appendix B | wwwamericanprogresso
TABLE 7
Comparison of specifications SNAP enrollment
Family-level linear probability
(1) (2) (3)
Log minimum wage -0028 -0049 -0042
(0014) (0017) (0009)
Unemployment rate (100) 0275 0297 0280
(0161) (0076) (0082)
Log median income -0077 -0055 -0039
(0014) (0012) (0011)
Employment-to-population ratio -0238 -0250 -0239
(0054) (004) (0038)
N 1242022 1242022 1242022
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses Observations are clustered at the state level The outcomevariable is binary or equal to one if a family is enrolled in SNAP All specifications include additional controls forfamily size race and marital status of the family head presence of children and presence of an adult male
Source Annual data from the March Current Population Survey for 1990 to 2012 estimation includes CurrentPopulation Survey probability weights
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3343
30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3443
Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3543
32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3743
34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
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Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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30 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
TABLE 8
Comparison of specifications SNAP enrollment
State-level linear regression
(1) (2) (3)
Log minimum wage -0019 -0035 -0031
(0009) (0012) (0012)
Unemployment rate (100) 0401 0370 0339
(0063) (0077) (0083)
Log median income -0081 -0073 -0061
(0011) (0013) (0013)
Employment-to-population ratio -0183 -0222 -0248
(0039) (0039) (0038)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the SNAP enrollment rate Allregressions include the share of households with children and the racial shares of the population
Source Annual data from the March Current Population Survey for 1990 to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3543
32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3743
34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
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Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3443
Appendix B | wwwamericanprogresso
TABLE 9
Comparison of specifications SNAP expenditures
State-level linear regression
(1) (2) (3)
Log minimum wage -0121 -0203 -0190
(0075) (0103) (0103)
Unemployment rate (100) 5292 5152 4313
(0464) (0576) (0628)
Log median income -0437 -0417 -0294
(008) (0086) (0078)
Employment-to-population ratio -0040 -0220 0244
(0261) (0260) (0240)
N 1127 1127 1127
State fixed effects Y Y Y
Year fixed effects Y
Division x-year fixed effects Y Y
State-specific linear trends Y
plt01 plt005 plt001
Note Robust standard errors are in parentheses The outcome variable is the natural log of state SNAPexpenditures per capita All regressions include the share of households with children and the racial shares ofthe state population
Source Annual data from Bureau of Economic Analysis national income and product accounts tables for 1990to 2012
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3543
32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3743
34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3843
Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3943
36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4043
Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3543
32 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3743
34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3843
Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3943
36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4043
Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3643
Appendix C | wwwamericanprogresso
Appendix C Harkin-Miller
policy simulation results
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linearprobability)
Model 2 state
enrollment (linearregression)
Model 3 s
expenditu(linear regre
Alabama $725 164 788682 -66922 -58897 -58906
Alaska $775 120 87436 -8104 -6887 -3288
Arizona $790 201 1319323 -67435 -56738 -64356
Arkansas $725 78 230489 -40977 -36063 -35248
California $800 206 7813680 -371131 -310222 -18223
Colorado $800 164 853155 -50684 -42365 -23926
Connecticut $870 91 326621 -22456 -17975 -13711
Delaware $725 186 170262 -12739 -11211 -10647
District of Columbia $825 133 84009 -5370 -4417 -3632
Florida $793 166 3208026 -195813 -164426 -13046
Georgia $725 160 1586336 -137741 -121224 -11004
Hawaii $725 96 133662 -19310 -16995 -14933
Idaho $725 92 147501 -22165 -19507 -15809
Illinois $825 95 1225084 -109088 -89742 -70955
Indiana $725 125 816233 -90818 -79928 -83985
Iowa $725 155 478011 -42716 -37594 -28556
Kansas $725 135 388269 -40082 -35275 -27461
Kentucky $725 130 568821 -60840 -53544 -52259
Louisiana $725 149 683832 -63929 -56263 -66083
Maine $750 77 101976 -16567 -14323 -15234
Maryland $725 144 846415 -81748 -71946 -38370
Massachusetts $800 130 864721 -64902 -54251 -42913
Michigan $740 146 1439141 -128801 -112140 -11022
Minnesota $725 133 713646 -74730 -65769 -37878
TABLE 10
SNAP enrollments Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3743
34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3843
Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3943
36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4043
Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3743
34 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP enrollment (2012) Predicted change in SNAP enrollment
RateTotal
(persons)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
Mississippi $725 129 386501 -41486 -36511 -46467
Missouri $750 172 1036182 -75131 -64952 -56244
Montana $790 132 132452 -10350 -8708 -5846
Nebraska $725 124 230683 -25773 -22683 -12189
Nevada $825 162 446035 -23349 -19209 -11894
New Hampshire $725 127 168404 -18359 -16157 -5735
New Jersey $825 160 1416666 -75175 -61843 -28236
New Mexico $750 149 310896 -25983 -22463 -22512
New York $800 192 3763553 -191193 -159815 -142182
North Carolina $725 174 1697193 -135417 -119179 -113503
North Dakota $725 87 61225 -9743 -8574 -4021
Ohio $795 143 1647345 -115869 -97169 -88580
Oklahoma $725 129 494053 -53006 -46650 -46854
Oregon $910 124 485326 -17036 -13328 -16398
Pennsylvania $725 161 2053643 -177315 -156052 -125586
Rhode Island $800 156 163730 -10258 -8574 -8698
South Carolina $725 94 445277 -65614 -57746 -50304
South Dakota $725 208 173749 -11586 -10197 -7458
Tennessee $725 142 914903 -89667 -78915 -99134
Texas $725 110 2863779 -362018 -318607 -253285
Utah $725 88 251107 -39658 -34902 -19390
Vermont $873 156 97792 -3823 -3055 -2475
Virginia $725 101 829771 -113723 -100086 -58212
Washington $932 72 496934 -23221 -17947 -17756
West Virginia $725 58 107875 -25792 -22699 -21665
Wisconsin $725 75 427822 -79521 -69986 -53210
Wyoming $725 164 94590 -8010 -7050 -3104
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3843
Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3943
36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4043
Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3843
Appendix C | wwwamericanprogresso
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 s
expenditu
(linear regre
Alabama $725 $290 $1397 -$1185 -$1043 -$1043
Alaska $775 $253 $185 -$262 -$223 -$106
Arizona $790 $257 $1686 -$935 -$787 -$892
Arkansas $725 $248 $733 -$636 -$560 -$547
California $800 $189 $7164 -$7276 -$6082 -$3573
Colorado $800 $157 $816 -$862 -$721 -$407
Connecticut $870 $191 $686 -$343 -$275 -$210
Delaware $725 $250 $229 -$205 -$180 -$171
District of Columbia $825 $366 $232 -$146 -$120 -$99
Florida $793 $294 $5676 -$4429 -$3719 -$2951
Georgia $725 $317 $3140 -$2936 -$2584 -$2346
Hawaii $725 $335 $465 -$449 -$395 -$347
Idaho $725 $225 $359 -$376 -$331 -$268
Illinois $825 $249 $3200 -$2096 -$1725 -$1364
Indiana $725 $220 $1439 -$1162 -$1023 -$1075
Iowa $725 $192 $589 -$658 -$579 -$440
Kansas $725 $159 $460 -$502 -$441 -$344
Kentucky $725 $298 $1303 -$1133 -$997 -$973
Louisiana $725 $315 $1450 -$1047 -$922 -$1083
Maine $750 $281 $373 -$267 -$231 -$246
Maryland $725 $188 $1109 -$1765 -$1553 -$828
Massachusetts $800 $206 $1366 -$1030 -$861 -$681
Michigan $740 $300 $2963 -$2400 -$2090 -$2054
Minnesota $725 $140 $755 -$1113 -$980 -$564
Mississippi $725 $326 $973 -$649 -$571 -$726
Missouri $750 $241 $1452 -$1278 -$1104 -$956
Montana $790 $190 $191 -$179 -$151 -$101
Nebraska $725 $140 $259 -$409 -$360 -$194
Nevada $825 $191 $527 -$441 -$363 -$225
New Hampshire $725 $126 $167 -$399 -$351 -$125
TABLE 11
SNAP expenditures Predicted changes by state under the Harkin-Miller bill
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3943
36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4043
Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 3943
36 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
StateMinimum wage
(2014)
SNAP expenditures (2012)Predicted change in SNAP expenditures
(millions of dollars)
Per resident
(millions of
dollars)
Total
(millions of
dollars)
Model 1 family
enrollment (linear
probability)
Model 2 state
enrollment (linear
regression)
Model 3 state
expenditures
(linear regression)
New Jersey $825 $160 $1420 -$1611 -$1325 -$605
New Mexico $750 $324 $675 -$513 -$444 -$445New York $800 $287 $5616 -$3766 -$3148 -$2801
North Carolina $725 $252 $2454 -$2187 -$1925 -$1833
North Dakota $725 $128 $90 -$162 -$143 -$67
Ohio $795 $259 $2995 -$2013 -$1688 -$1539
Oklahoma $725 $248 $945 -$799 -$703 -$706
Oregon $910 $322 $1255 -$272 -$213 -$262
Pennsylvania $725 $218 $2779 -$2930 -$2579 -$2075
Rhode Island $800 $280 $294 -$173 -$144 -$147
South Carolina $725 $291 $1373 -$1337 -$1177 -$1025South Dakota $725 $198 $165 -$192 -$169 -$123
Tennessee $725 $324 $2091 -$1413 -$1243 -$1562
Texas $725 $230 $5997 -$6402 -$5634 -$4479
Utah $725 $141 $402 -$614 -$541 -$300
Vermont $873 $230 $144 -$66 -$53 -$43
Virginia $725 $173 $1413 -$2062 -$1815 -$1056
Washington $932 $244 $1682 -$350 -$270 -$267
West Virginia $725 $273 $508 -$451 -$397 -$379
Wisconsin $725 $204 $1166 -$1302 -$1146 -$871Wyoming $725 $95 $55 -$105 -$93 -$41
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4043
Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4043
Appendix C | wwwamericanprogresso
FIGURE 2
Raising the minimum wage to $1010would cut taxpayer costs in every state
Predicted decreases in cost and enrollment
in SNAP in 50 states
$200+$51ndash$100
$101ndash$200
0ndash$25
$26ndash$50
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4143
38 Center for American Progress | The Effec ts of M inim um Wages on SNAP Enro llments and Expe nditures
Endnotes
1 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo available athttpwwwfnsusdagovsnapeligibility (last accessedFebruary 2014)
2 For this initial analysis we do not consider Harkin-Millerrsquos increase in subminimum wages for tippedworkers To do s o would increase the estimated SNAP
savings by an unknown amount
3 The Congressional Budget Office estimates thatworkers currently earning between $1010 and $1150per hour would see their wages rise under the Harkin-Miller proposal Congressional Budget O ffice ldquoTheEffects of a Minimum Wage Increase on Employmentand Family Incomerdquo (2014)
4 Marianne Page Joanne Spetz and Jane Millar ldquoDoesthe Minimum Wage Affect Welfare Caseloadsrdquo Journalof Policy Analysis and Management 24 (2) (2005)273ndash295
5 Marianne Bitler and Hilary Hoynes ldquoThe More ThingsChange the More They Stay the Same The SafetyNet Living Arrangements and Poverty in the GreatRecessionrdquo NBER Working Paper 194 49 2013
6 Sylvia Allegretto and others ldquoFast Food Poverty Wages The Public Cost of Low-Wage Jobs in the Fast-FoodIndustryrdquo (Berkeley California Center for LaborResearch and Education 2013) available at httplaborcenterberkeleyedupubliccostsfast_food_poverty_wage
7 David Neumark and William Wascher ldquoDoes a HigherMinimum Wage Enhance the Effectiveness of theEarned Income Tax Creditrdquo Industrial and LaborRelations Review 64 (4) (2011) 712ndash746
8 David Lee and Emmanuel Saez ldquoOptimal MinimumWage Policy in Competitive Labor Marketsrdquo Journal ofPublic Economics 96 (9) (2012) 739ndash749
9 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family IncomerdquoFebruary 2014
10 Jesse Rothstein ldquoIs the EITC as Good as an NITConditional Cash Transfers and Tax Incidencerdquo AmericanEconomic Journal Economic Policy 2 (1) (2010) 177ndash208
11 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family Incomerdquo
12 Dube Arindrajit 2013 rdquoMinimum Wagesand the Distribution of Family IncomerdquoUnpublished working paper Available at httpsdldropboxusercontentcomu15038936Dube_MinimumWagesFamilyIncomespdf
13 As Dube explains in ldquoThe poverty of Minimum WageFactsrdquo the simulation approach underestimate stemsfrom a number of unwarranted assumptions includingthe range of actual wage increases and the accuracy ofwage data in the Current Population Survey The causal
approach does not make these assumptions
14 Allegretto Sylvia and others 2013 ldquoCredible ResearchDesigns for Minimum Wage Studiesrdquo Working Paper148-13 University of California Berkeley Institutefor Research on Labor and Employment Available athttpwwwirleberkeleyeduworkingpapers148-13pdf
15 Congressional Budget Office ldquoThe Effects of a MinimumWage Increase on Employment and Family In comerdquo
16 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo (2012)
17 Ibid
18 Ibid
19 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
20 US Department of Agriculture ldquoSupplementalNutrition Assistance Program (SNAP)rdquo
21 Congressional Budget Office ldquoThe SupplementalNutrition Assistance Programrdquo
22 Ibid
23 We deviate from the Census Bureaursquos definition ofa family unit which is ldquotwo people or more (on e ofwhom is the householder) related by bir th marriageor adoption and residing togetherrdquo US Bureau ofthe Census ldquoCurrent Population Survey DefinitionsFamilyrdquo available at httpwwwcensusgovcpsabout
cpsdefhtml (last accessed February 2014) We countas a family unit any individual residing on his or herown two or more persons residing together whodo not belong to a family in the March CPS sampleare constructed as one family in our analysis For thepurposes of food stamp allocations the consumptionresulting from this transfer is probably distributed tofamily members (rather than household members ora single individual within the household) Howeversingle individuals canmdashand domdashreceive SNAPbenefits Excluding them would fail to make theanalysis reflective of the population at large
24 Strictly the family level linear probability modelpredicts the percentage-point decrease in theprobability that an individual family will receive SNAPpayments When applied to a large number of familieshowever we are able to interpret the coefficient asa decrease in the mean of enrollmentmdashthat is a
decrease in the enrollment ratemdashby applying the lawof iterated expectations
25 We generate expenditure predictions from theenrollment modelsmdashand conversely generateenrollment predictions from the expenditure modelmdashby assuming that expenditures per enrolled familyremains the same before and after the minimum wagechange In practice this is likely to be a conservativeestimatemdashthat is to underestimate the decrease inSNAP activity Average SNAP benefits per family willalso decrease as many families that remain eligible forSNAP experience income gains
26 Wage and Hour Division ldquoMinimum Wage Laws inthe States ndash Januar y 1 2014rdquo available at httpwwwdolgovwhdminwageamericahtm (last accessedFebruary 2014)
27 See for example Sylvia Allegretto and others ldquoCredibleResearch Designs for Minimum Wage Studiesrdquo WorkingPaper 148-113 (Berkeley California Institute forResearch on Labor and Employment 2013) available athttpwwwirleberkeleyeduworkingpapers148-13pdf
28 We will report these results in a forthcoming workingpaper
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4243
Endnotes | wwwamericanprogresso
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo
8122019 The Effects of Minimum Wages on SNAP Enrollments and Expenditures
httpslidepdfcomreaderfullthe-effects-of-minimum-wages-on-snap-enrollments-and-expenditures 4343
The Center for American Progress is a nonpartisan research and educational institute
dedicated to promoting a strong just and free America that ensures opportunity
for all We believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect these values
We work to find progressive and pragmatic solutions to significant domestic and
international problems and develop policy proposals that foster a government that
is ldquoof the people by the people and for the peoplerdquo