The Welfare Effects of Eligibility Expansions : Theory and Evidence from SNAP

We study the U.S. rollout of eligibility expansions in the Supplemental Nutrition Assistance Program. Using administrative data from the U.S. Department of Agriculture, we show that expanding eligibility raises enrollment among the inframarginal (always-eligible) population. We use an online experiment and an administrative survey to measure the role of information frictions and stigma as mechanisms. We find that raising the eligibility threshold reduces stigma without causing the new take-up; instead, information frictions explain the results. To interpret our findings, we develop a general model of the optimal eligibility threshold for welfare programs with incomplete take-up. The optimal threshold depends on the size of the inframarginal take-up response to changing the threshold, as well as how much information frictions and stigma contribute. Given our empirical results and certain modeling assumptions, the SNAP eligibility threshold is lower than optimal