Paying for Free Lunch: The Impact of CEP Universal Free Meals on Revenues, Spending, and Student Health

Abstract The Community Eligibility Provision (CEP) of the Healthy, Hunger-Free Kids Act of 2010 allows school districts to provide free meals to all students if over 40 percent of them are directly certified as free-meal eligible. While emerging evidence documents positive effects on student behavior and academics, critics worry that CEP has unintended consequences for student weight, district finances, and instructional spending. We investigate these using school and district data from New York State and a difference-in-differences design. We exploit staggered CEP adoption, and explore differences between metro, town, and rural districts. We investigate potential mechanisms, including lunch and breakfast participation, and use event studies to assess pre-adoption trends and effects over time. We find that CEP increases total food expenditures, but spending per meal declines. Local food service revenues decline, but increased federal reimbursements more than compensate for local food revenues and expenditures changes. Indeed, while some worry that CEP crowds out education spending, we find no effect on instructional expenditures. Furthermore, CEP increases participation in school lunch and breakfast, but has no deleterious effect on weight outcomes and, instead, is associated with obesity declines in secondary grades. Rural districts experience larger impacts than metro and town districts, alongside some negative fiscal effects.