Do Food Stamp Asset Limits Hinder Household Saving?

Many public benefits programs exclude people with more-than-minimal asset wealth in order to prevent individuals with substantial savings from relying on the government. In recent years, researchers and policymakers have grown concerned that asset limits may also discourage low-income households from saving. The Capstone team's research measures the effect of asset limits on savings behavior by exploiting state-level changes in program rules for the Supplemental Nutrition Assistance Program, popularly known as food stamps. Using data from the Survey of Income and Program Participation, as well as policy variables compiled from various sources, the team examined how changes to such asset restrictions have impacted liquid assets, vehicle wealth, and net worth among both food-stamp participants and low-income families.