Report

The Costs of Benefit Delivery in the Food Stamp Program

Julia B. Isaacs

Abstract

This study compares the Food Stamp Program (FSP) with eight other public assistance programs across four measures of program effectiveness—administrative costs, error payments, program access, and benefit targeting. The comparison includes two other USDA nutrition assistance programs, three cash assistance programs, and three programs providing noncash benefits other than food or nutrition assistance. Results show that the FSP and the Earned Income Tax Credit (EITC) present contrasting patterns. The EITC program has lower administrative costs and higher program access rates than the FSP, but the FSP is more successful in limiting overpayments. Missing information makes it hard to generalize across the other programs, but there is some evidence suggesting that programs with higher errors have lower administrative costs. Low administrative costs also appear to be inversely associated with good program access for recipients. Also, programs that are more highly targeted tend to have higher benefit delivery costs.

The Food Stamp Program is one of the nation’s largest programs providing benefits directly to low-income families. In 2006, the program provided benefits to 26.7 million people in an average month, at a combined federal and state cost of $35.8 billion. While most of these funds were spent on food stamp benefits for families, administrative costs totaled $4.8 to $5.7 billion, depending on how such costs are defined.

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