Dynamics of macroeconomic factor effects on food assistance program participation in the United States

Abstract

Using polynomial distributed lag (PDL) models, the impacts of macroeconomic factors relating to economic, financial, and sociological stress and designed to be short-run predictors of U.S. economic performance are identified and assessed concerning participation in key food assistance programs (SNAP, WIC, and NSLP). The econometric analysis covers the period October 1999 to September 2020. The impact of COVID-19 on participation in these programs also is quantified. Based on the parameter estimates obtained from the econometric PDL models, ex-ante forecasts of participation in the SNAP, WIC, and NSLP subsequently are made and evaluated over the period October 2020 to August 2021. The empirical results show that different sets of macroeconomic drivers affect participation levels across the respective food assistance programs. No macroeconomic factor is common across SNAP, WIC, and NSLP participation. Changes in macroeconomic conditions which influence SNAP, WIC and NSLP participation are not just contemporaneous but also affect participation levels anywhere from 1 month to 12 months later. Importantly, this research allows not only the determination of the macroeconomic factors which affect program participation but also allows the determination of the ability of the respective models to forecast program participation. As such, the Food and Nutrition Service will be in better position to assess program needs as well as to forecast program participation levels to minimize errors in the budgetary process.