Report on Alternative Outcome Measures: Temporary Assistance for Needy Families (TANF) Block Grant . Food Stamp Receipt


An important indicator of well-being is whether all members of a family have regular access to food and are free from hunger. Ideally, we would measure access to food directly, such as through the food insecurity and hunger scale developed by the U.S. Department of Agriculture. However, while this scale is administered annually as a supplement to the Current Population Survey, the sample sizes are not large enough to track changes at the state level. One possible alternative is to use an intermediate outcome measure, such as participation in the Food Stamp Program. The Food Stamp Program is an entitlement program that is available to help all low-income families who meet the national eligibility standards, including families receiving cash assistance and working families, to purchase food for an adequate diet. Several measures could potentially be used to gauge states' success in ensuring that eligible families receive Food Stamps. These include: (1) the percentage of families eligible for Food Stamps that receives them, (2) the percentage of poor children in working families who are receiving Food Stamps; and (3) the percentage of former TANF recipients receiving Food Stamps; as well as variations on these alternatives.

Under the High Performance Bonus, HHS has chosen to award bonuses based on a variation of option 2. Beginning in FY 2002, bonuses will be provided to the three states with the greatest percentage of low-income working households in the state receiving Food Stamps and to the seven states with the greatest percentage point improvement in the same measure. For this purpose, low-income working households would be defined as households with children under the age of 18 which have an income of less than 130 percent of poverty and earnings equal to at least half-time, full-year employment at minimum wage. The threshold of 130 percent of poverty was used because most, although not all, families at this income level are eligible for Food Stamps.

Measurement issues. While these measures are similar in that they attempt to capture the proportion of poor individuals receiving Food Stamps, they differ in the extent to which they can be influenced by the TANF program. The first option, the percentage of eligible families receiving Food Stamps, uses a relatively broad population as the denominator - the population that is eligible for Food Stamps. Although a large part of the Food Stamp caseload traditionally has received AFDC/TANF, this measure would address the overall effectiveness of the Food Stamp Program in reaching its target population, as well as the effectiveness of the TANF program in ensuring that individuals who are diverted from or leave cash assistance receive this benefit. The second measure, the percentage of poor children in working families receiving Food Stamps, is more narrow than the first in that it focuses on children in poor working families. The measure examines Food Stamp receipt by a group that up to now has had relatively low participation rates in Food Stamps, although the levels are increasing somewhat. The third measure focuses on whether individuals who had received TANF were receiving Food Stamps after they left the program. While this measure focuses on an outcome that can be directly influenced by the TANF program, it cannot capture the extent to which individuals who are diverted from TANF assistance on the front end receive Food Stamp benefits. Since Food Stamp eligibility is on a household basis, it should not matter much whether children or adults are the unit for the measure.

Data issues. The population measures are best measured by a combination of national survey data and Food Stamp administrative data. In terms of national survey data, the American Community Survey (ACS) is the preferred data source. These national surveys are best-suited to calculate the denominator of the first and second measures. The number of poor children (defined as "below the poverty line") in working families (or a reasonable proxy for working) would be measured directly using the ACS. Food Stamp eligibility would not be measured directly, but could be estimated based on the information collected, although some measurement errors will result from the different periods of observation (surveys collect annual data while Food Stamp eligibility is based on monthly income).

While the CPS and ACS collect data on Food Stamp receipt, surveys have historically under-reported information on receipt of public benefits and are not considered the best gauge of program participation levels. An alternative would be to use Food Stamp Quality Control (QC) data to calculate the numerator of the measures. Food Stamp QC data provide high quality, timely program enrollment data on an annual basis, although it is a sample and there are measurement differences between the QC database and national surveys (e.g., QC captures data on program participation and household circumstances including income for a specific month, while national surveys examine program participation and household circumstances over the past year).

The third measure - the percentage of former TANF recipients who receive Food Stamps - could be calculated by using linked TANF and Food Stamp administrative data. This would require states to use their TANF administrative data to determine those individuals who left TANF and to match this group against Food Stamp administrative data. This measure would be more workable if it was restricted to a limited period of time after TANF exit.

Fairness issues. In terms of treating states fairly and equitably, the size of the relatively broad population groups that form the denominators for the first two measures is likely to be influenced by factors that are beyond the reach of the TANF program. The number of families eligible for Food Stamps or in poor working families is likely to be affected by the economy in the state as well as other programs and policies the state may have in place - including child care, health insurance, state earned income tax credits, and others. States with more poor families would have to work with a greater proportion of families than states with fewer poor families.

In addition, all else equal, states with higher TANF benefit levels will probably fare better on the two population measures because many of their working poor families will be eligible for TANF as well as Food Stamps (participation rates for Food Stamps are higher when families are also receiving TANF). These states are likely to perform more poorly on the leavers measure because those families earning enough to exit TANF will have higher incomes, making them eligible for only a small amount of Food Stamp benefits, which might not be worth the effort needed to continue to participate. In states with lower TANF benefit levels, families with earnings would become ineligible for TANF sooner, making their Food Stamp benefit levels higher, and increasing the likelihood of their remaining on Food Stamps longer.(4)