It's a cruel summer: Household responses to reductions in government nutrition assistance

- New causal evidence on household responses to reductions in nutrition benefits.
- Low-income households spend more on food at home due to benefit reduction.
- Increased spending on food is not enough to compensate for lost benefits.
- Households unable to absorb more than $3 reduction in benefits per child per week.

The appropriate size and scope of government nutrition assistance programs is a regular source of debate among policy-makers, and with calls to reduce government benefits, a clear understanding of household responses to any proposed benefit reduction is critical. Exploiting the design of U.S. nutrition assistance programs, we examine how low-income households reallocate their budgets following an exogenous reduction in nutrition assistance benefits. The magnitude of our results suggests that the budget for an average low-income household with children is severely inflexible and likely unable to absorb more than a $2 to $3 reduction in nutrition benefits per child per week.