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Efficiency versus Equity in the Provision of In-Kind Benefits: Evidence from Cost Containment in the California WIC Program
- Journal of Human Resources
- University of Wisconsin Press
- Volume 58, Number 2, March 2023
- pp. 363-392
- Article
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ABSTRACT:
The government often contracts with private firms to deliver in-kind safety net benefits. These public–private partnerships generate agency problems that could increase costs, but cost containment reforms may discourage firm participation. We study a 2012 reform of California's Special Supplemental Nutrition Program for Women, Infants, and Children that reduced the number of small vendors. We show that within-zip-code access to small vendors increases take-up among first-time and foreign-born mothers, suggesting that small vendors are distinctly effective at lowering take-up barriers among women with high program learning costs. Thus, cost containment reforms may have unintended consequences of inequitably reducing program access.