Relying on Private Firms as Safety Net Providers: WIC Participant Responses to Vendor Disqualification

When participants in public assistance programs must redeem benefits at private firms, a firm’s decision to be authorized to redeem benefits affects participants’ benefit access. Using a novel natural experiment, I investigate Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) participants’ response to decreases in availability of authorized food vendors. I find that participants who lose access to an authorized vendor are 32 percentage points less likely to participate in WIC. Among those who continue to participate, food benefits redeemed decrease by $5 per month. The results indicate a tension between firms’ compliance behavior and participants’ benefit access.