The Effect of Means-Tested Transfers on Work: Evidence from Quasi-Randomly Assigned SNAP Caseworkers

Canonical economic theory clearly predicts means-tested transfers will reduce work. We provide new evidence on this question in the context of the Supplemental Nutrition Assistance Program (SNAP)—the backbone of the U.S. safety net. It is challenging to identify the causal effects of SNAP, so we introduce an examiner design based on conditional random assignment of SNAP applicants to caseworkers using rich administrative data. We empirically establish that caseworkers help determine whether applicants receive benefits. We then use this as an instrument for SNAP receipt to produce new, comprehensive and generalizable evidence of the labor supply effects of modern SNAP. Our results shed light on why the canonical theory’s predictions might not always bear out.