Economywide impacts of the Supplemental Nutrition Assistance Program

Abstract

Most Supplemental Nutrition Assistance Program (SNAP) research focuses on individuals who receive SNAP without examining the effects on the broader economy. We develop a general equilibrium model of the US economy to quantify SNAP's broader fiscal consequences. We find that SNAP expands the agricultural and food sectors by about 1% while slightly shrinking service sectors favored by higher income households. Effects on goods and factor prices are modest, with virtually no deadweight losses associated with the taxation needed to fund SNAP. SNAP improves the welfare of low-income recipient households by 4.9%, while having a negligible adverse effect on high-income households.