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To help those in need make ends meet, the Federal Government offers a variety of assistance programs. Some provide cash, but more offer in-kind assistance such as subsidized rents or assistance with home energy bills. USDA provides eligible households with in-kind assistance in the form of Supplemental Nutrition Assistance Program, or SNAP, benefits to buy groceries (formerly called the Food Stamp Program). But these benefits, and other in-kind assistance, are not counted as income when the Census Bureau calculates official poverty rates. Not accounting for these benefits understates the resources of U.S. families who receive them and masks the greater relative hardship of those who do not.
Working with colleagues at the World Bank and the University of Illinois, I included the value of SNAP benefits as income to get a more accurate view of SNAP’s anti-poverty effects. We found that with SNAP benefits included as income, the poverty rate, or prevalence of poverty, was reduced by an average of 4.4 percent a year from 2000 to 2009. Just looking at 2009, we found that including SNAP benefits as income would have lowered the official U.S. poverty rate from 14.3 percent to 13.2 percent.
My colleagues and I wanted to look at how SNAP affects not just the number of people in poverty, but also the intensity of poverty they experience. Sometimes assistance doesn’t raise a person or family out of poverty, but they are made better off by receiving the assistance. When this happens, the assistance is doing more good than what shows up in official poverty statistics.
We used two measures that capture the depth and the severity of poverty to look at how SNAP raises poor people’s incomes, even if the program doesn’t lift them out of poverty. The depth and severity of poverty measures are both functions of how far families’ incomes are below the official poverty level, but the severity measure is more sensitive to income changes among the poorest of the poor.
These measures show that during 2000-09, SNAP benefits reduced the depth of poverty by an average of 10.3 percent, and the severity by an average of 13.2 percent. The progressive nature of SNAP—where families with lower incomes receive larger benefits than similarly-sized families with higher incomes—explains its greater impact on depth and severity than on the simple poverty rate.
SNAP was even more effective in lessening poverty among children—a group that experiences significantly higher rates of poverty than the overall population. The official poverty rate for children in 2009 was 20.7 percent. Including SNAP benefits in family income lowers the prevalence of child poverty that year to 18.7 percent. SNAP benefits reduced the depth of child poverty by an annual average of 15.5 percent during 2000-09 and the severity by 21.3 percent. Check out more of the findings in our report, Alleviating Poverty in the United States: The Critical Role of SNAP Benefits.