Skip to main content

Do minimum wage increases affect SNAP benefits? (Snyder, Rinkevich, & Yuan, 2019)

Absence of conflict of interest.

Citation

Snyder, T., Rinkevich, S., & Yuan, W. (2019). Do minimum wage increases affect SNAP benefits? B.E. Journal of Economic Analysis & Policy, 19(2). doi:10.1515/bejeap-2018-0045

Highlights

  • The study’s objective was to examine the impact of an increase in the minimum wage on federal Supplemental Nutrition Assistance Program (SNAP) enrollment and expenditures.   

  • The authors used statistical models to estimate the relationship between the minimum wage and SNAP expenditures and receipt from 1997 to 2015. The authors used Food and Nutrition Services data on the number of people who received SNAP benefits and SNAP expenditures per person, per state; and U.S. Department of Labor data on federal and state minimum wages.  

  • The study found a statistically significant relationship between the real minimum wage and SNAP recipiency and expenditures. For initially high values of the minimum wage, increases in the minimum wage were associated with increases in state SNAP recipiency and expenditures per capita. For initially low values of the minimum wage, increases in the minimum wage were associated with decreases in state SNAP recipiency and expenditures per capita.   

  • The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to an increase in minimum wage; other factors are likely to have contributed.  

Intervention Examined

Increased Minimum Wage

Features of the Intervention

The study examined whether increases in the minimum wage led to increases in SNAP enrollment and expenditures.

Features of the Study

The authors used a fixed-effects regression model to examine the relationship between minimum wages and SNAP benefits. The authors used state-level data and considered both measures of annual SNAP expenditures per capita and the share of state residents receiving SNAP benefits in a given year. The authors controlled for relevant variables that can affect SNAP enrollment and benefits in each regression model, including education, age, population density, gross domestic product per capita, and poverty and unemployment rates. The study included 950 state-by-year–level observations from 1997 to 2015. The authors drew from various data sources for the primary findings, including Food and Nutrition Services data on the number of people who received SNAP benefits and SNAP expenditures per capita, and data from the Department of Labor on federal and state minimum wages. Data for control variables primarily came from U.S. census data. The authors also conducted a secondary analysis using Bureau of Economic Analysis data on the regional price index for 2008 through 2014 to adjust minimum wages based on differences in the purchasing power of the minimum wage across states and over time. 

Findings

  • The study found a statistically significant relationship between the unadjusted minimum wage and SNAP recipiency. The relationship was negative for minimum wages less than $7.28 per hour and positive for minimum wages greater than $7.28 per hour. Results were similar for analysis based on the adjusted minimum wage.  

  • The study found a statistically significant relationship between the unadjusted minimum wage and SNAP expenditures per state. The relationship was negative for minimum wages less than $7.52 per hour and positive for minimum wages greater than $7.52 per hour. Results were similar for analysis based on the adjusted minimum wage. 

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to an increase in minimum wage; other factors are likely to have contributed.  

Reviewed by CLEAR

May 2021

Topic Area