Government shutdown and SNAP disbursements: effects on household expenditures

Abstract

We test the ability of SNAP eligible households to respond to a temporary change in benefit timing. We exploit the 2018–2019 US government shutdown in which all states were federally mandated to pay February SNAP benefits in January. This created a short-term windfall (two payments very close to each other) followed by a longer than normal gap during which no SNAP disbursements were received. Using a triple differences approach, we show that expenditures are lower in February (relative to other months) 2019 (relative to 2018) for SNAP recipients (relative to near-eligible households). We complement this finding by exploiting preexisting state-level differences in disbursement schedules that drove some states to temporarily alter the timing of the 2019 March and April SNAP disbursements. Diff-in-diff estimates show that SNAP eligible households in those states reduced spending. Our findings are inconsistent with the permanent income hypothesis and suggest that the timing of benefits matters for household consumption.