Jill Richardson's post at La Vida Locavore on extremely low food stamp participation rates in San Diego got me thinking about how much room there is to improve enrollment in this program.

Bleeding-heart liberal that I am, I'd like to see 100 percent of people who qualify for food stamps get them, just for the sake of reducing hunger in our communities.

But let's leave ethical concerns aside for now. Economic researchers, most recently Moody's Economy.com, have calculated that expanding the food-stamp program produces more economic stimulus than any other kind of government spending, and much more than any form of tax cuts.  Every additional dollar spent on food stamps translates into $1.73 circulating in the economy.

This page on the U.S. Department of Agriculture's website contains links to many studies comparing the state participation rates for the Supplemental Nutrition Assistance Program (the official name for the food stamp program). All of the recent annual reports are pdf files. They show estimated numbers of people eligible for food stamps in each state, as well as an estimated percentage of those who receive food stamps.

In many states, food stamp participation rates have improved over the past six years. The median state in 2003 had an estimated 57 percent of eligible residents enrolled in the food stamp program, but by 2006 (the most recent year for which data are available on the USDA site), that figure rose to about 67 percent. Still, in an average state, only two-thirds of people eligible for food stamps are getting them.

The state-by-state figures reveal huge variation. In the top three states, more than 90 percent of people eligible for food stamps are enrolled in the program. That figure is above 80 percent for the next five states. In the states near the bottom, barely 50 percent of eligible residents get food stamps, and the figure is even lower in some major metropolitan areas.

I can't generalize about what needs to be done to improve participation in the food stamp program, because different states would need to tweak their policies in different ways. The USDA site links to research on factors that affect enrollment, and Jill Richardson talks about many of those factors here.

The economic impact of getting food stamps to more eligible people would be significant. California has consistently been near the bottom in terms of food stamp enrollment rates. The 2006 chart shows the state dead last, with only 50 percent of approximately 3.9 million eligible Californians estimated to be receiving food stamps. Even modest improvement in the enrollment rate would result in hundreds of thousands more people receiving food stamps. Those people would have more to spend on goods and services. Many retailers would benefit as the money flowed through the economy.

Iowa's food stamp enrollment rate is closer to the national average, but if we raised it from the 71 percent estimated for 2006 to 80 percent, nearly 30,000 more Iowans would be receiving food stamps. If we raised food stamp participation above 90 percent, roughly 60,000 more Iowans would be receiving food stamps.

Given the multiplier effect of food stamp benefits on economic activity, this program merits attention from policy-makers. Government spending on infrastructure projects is worthwhile, especially if used for smart investments in our transportation system or for making schools more green. However, food stamp recipients have the potential to get money circulating in the economy, saving jobs in the retail sector, faster than most "shovel-ready" infrastructure projects. Remember, no other form of government spending has more economic stimulus "bang for the buck" than food stamps.

There's more...