Trends in Income Volatility and Food Insufficiency Among U.S. Households: The Effects of Imputed Income in the Survey of Income and Program Participation
Income volatility increases families’ risk of being food insecure. Food assistance benefits, such as SNAP and WIC, exist, in part, to mitigate the consequences of year-to-year variability in household incomes. There is a substantial amount of year-to-year variability in household incomes in the U.S., though there is a debate as to whether this variability has been increasing in recent decades. Increases in imputation rates across SIPP panels can create a mechanical, and incorrect, increase in measured income volatility over time. In this paper, we explore the relationship between household income volatility and food insecurity and the trend in this relationship and whether these measured relationships are affected by the rising rates of income imputation in the SIPP. We find that the use of imputed observations to construct income variability leads to the association between income volatility and food insecurity to be understated. Similarly, the trend in this association is also understated by the use of imputed values.
