Therese Bonomo (NU): Voucher Structure and Firm Participation in In-Kind Transfer Programs: Evidence from SNAP and WIC
Abstract: Many in-kind transfer programs rely on private firms to deliver benefits. I show that firms' willingness to participate in these programs depends on how the benefit is structured. Quantity-based vouchers, which entitle recipients to a fixed basket of goods, are typically paired with price controls to contain program costs; value-based vouchers, which offer a fixed monetary amount, do not. I test whether this distinction matters to firms in the context of two nutrition assistance programs: WIC (a quantity voucher) and SNAP (a value voucher). Using administrative data on California grocery vendors and local minimum wage increases as shocks to firm costs, I find that the number of firms accepting WIC per capita falls by 3 percent in the year following a wage increase, with no change in SNAP participation. Over the same time frame, WIC redemptions fall by 2.7 percent while caseloads fall by only 0.5 percent, indicating that thinning vendor networks impede access even among recipients who remain enrolled. These results show that voucher design can influence firm participation in in-kind transfer programs, shaping not only which firms deliver benefits, but how sensitive that participation is to conditions outside the program's control.
Economics
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