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The Social Safety Net in the Wake of COVID-19 (WP-20-43)

Marianne Bitler, Hilary Hoynes, and Diane Whitmore Schanzenbach

The COVID-19 crisis has led to spiking unemployment rates with disproportionate impacts on low-income families. School and child-care center closures have also meant lost free- and reduced-price school meals. Food prices have increased sharply leading to reduced purchasing power for families’ limited income. The Families First Coronavirus Act and the CARES Act included robust responses including expansions to unemployment insurance (expansions in eligibility and $600 per week supplement), a one-time payment of $1,200 per adult and $500 per dependent, an increase in SNAP payments, and the launch of the Pandemic EBT program to replace lost school meals. Despite these efforts, real time data show significant distress – notably food insecurity rates have increased almost three times over the pre-COVID rates and food pantry use has also spiked. In this paper, the researchers explore why there is so much unmet need despite a robust policy response. They provide evidence for three explanations: (1) timing - relief came with a substantial delay (due to overwhelmed UI systems/need to implement new programs); (2) magnitude – payments outside UI are modest; and (3) coverage gaps – access is lower for some groups and other groups are statutorily excluded.

Marianne Bitler, Professor of Economics, University of California Davis

Hilary Hoynes, Professor of Public Policy and Economics, Haas Distinguished Chair in Economic Disparities, University of California Berkeley

Diane Whitmore Schanzenbach, Margaret Walker Alexander Professor and IPR Director and Fellow, Northwestern University

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