Financial Repercussions of SNAP Work Requirements

Samuel Dodini, Jeff Larrimore and Anna Tranfaglia
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Anna Tranfaglia: https://www.federalreserve.gov/econres/anna-e-tranfaglia.htm

No 2022-030, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This paper considers the credit response of individuals after the implementation of new work requirements for Supplemental Nutrition Assistance (SNAP) benefits using a large nationally representative sample of credit records. It does so by exploiting county-level variation in the implementation of work requirements after the Great Recession in a difference-in-differences design. We find that the implementation of new SNAP work requirements leads more people to seek out new credit and leads to an increase in credit account openings. New work requirements also result in an increase in total outstanding balances on bank and retail card accounts and increase the number of borrowers that are past due on these accounts. These findings suggest that some individuals are turning to credit and debt products to cover expenses after losing eligibility for SNAP benefits.

Keywords: Credit cards; SNAP Benefits; Work Requirements (search for similar items in EconPapers)
JEL-codes: G51 H31 H53 I38 (search for similar items in EconPapers)
Pages: 51 p.
Date: 2022-05-24
New Economics Papers: this item is included in nep-ban
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https://www.federalreserve.gov/econres/feds/files/2022030pap.pdf (application/pdf)

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Journal Article: Financial repercussions of SNAP work requirements (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2022-30

DOI: 10.17016/FEDS.2022.030

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