Incentive to Retrench? Investigating the Interactions of State and Federal Social Assistance Programs after Welfare Reform

Spending on cash assistance from the Temporary Assistance for Needy Families (TANF) program has declined throughout the United States in recent decades. Simultaneously, spending on the federally funded Supplemental Nutrition Assistance Program (SNAP) and Supplemental Security Income (SSI) programs has increased. This article investigates whether retrenchment of TANF has led to increases in the participation in and levels of benefit receipt of SNAP and SSI. Applying a differences-in-differences approach on household income data from 1997 to 2015, we find that a $50 policy-induced decline in states’ TANF cash assistance allocations leads to an increase of $17–$32 per month in SNAP and SSI benefit allocations among single-mother households. From a household perspective, these findings suggest that SNAP and SSI benefits have partially offset TANF’s decline. From a state incentive perspective, we find state governments have the ability, and a financial incentive, to shift social assistance caseloads to the federal government.