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New Study Shows Free School Lunches Boost Earnings

February 13, 2018 - 4:00pm

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A new study from a trio of economists proves the old adage that there's no such thing as a free lunch. According to their research, free lunch actually has payoffs -- to the tune of $11,700 more in lifetime earnings for future workers.
The study starts in the 1950s and 60s, when Sweden gradually rolled out high-quality, nutritious, free lunches to every child in its school system. Thanks to Sweden's meticulous data collection, the authors were able to link detailed information about individual schoolchildren -- including how many years they had access to free lunches -- with decades of subsequent earnings, employment, and even medical data.
The economists discover that the school lunch program had tremendous positive effects, increasing adult earnings by about 0.35 percent for every year a student had access to the program, for a total of 3 percent -- or $11,700 over the working years -- for the average kid who was exposed throughout nine years of primary school.
The program's positive effects were nearly universal, with large gains for the students with family incomes in the bottom 75 percent. Even the richest students derived some benefit, though it was statistically insignificant. For the lowest-income children, the gains were particularly substantial: Kids in the bottom 25th percentile of family income increased their adult earnings by nearly 5.5 percent, for an average of $21,560 more in lifetime earnings.* That means the program's benefits were seven times larger than the cost of the meals. And, since low-income students benefitted more than students in higher income groups, the program can actually be credited with decreasing inequality.
The study adds to abundant evidence that getting enough food helps kids succeed in school -- and in life -- with improved school performance, greater economic self-sufficiency, and better health.
Implementing a similar program in the United States would likely have an even larger effect than the one researchers observed in Sweden. In part, that's because more students stand to gain. School lunches in the United States are typically free only to the lowest-income students -- about 20 million kids last year -- and experts say they have historically been underfunded and inadequately nutritious.
The program's benefits were seven times larger than the cost of the meals
There's also a dramatic difference in inequality between the two countries: Swedes have a much smaller income gap between the rich and the poor, and Swedish kids are only half as likely to grow up in poverty as American kids. As the authors note, "Food shortage and hunger was uncommon in Sweden during the 1950s and 1960s." The program's primary goal was to improve nutrition -- similar to more recent US changes like the School Meals Initiative for Healthy Children in 1994 -- rather than addressing a nationwide problem with childhood hunger.
By contrast, in the United States about 1 in 12 families with children experienced food insecurity in 2016, and our nutrition assistance benefits for families (like SNAP, formerly known as food stamps) are so modest that they can't address the issue. That means school meals are all the more important for low-income American kids; it's where they get as many as half of their calories. As a result, we'd likely have an even more significant proportion of students making the types of large income gains that Sweden observed with its poorest students.
The argument against such a program, of course, would be its cost. At $3.23 per meal, extending free school lunch to every American schoolchild would cost roughly $19.6 billion per year. ** That's about 13 percent of what Trump and Republican lawmakers just spent on their monumentally unpopular tax bill. But unlike the tax plan, research shows that this would significantly boost an average worker's earnings -- and it'd be a lot more than the temporary bump of $1.50 per paycheck Paul Ryan boasted his tax law is bringing to workers.
Next week, the stakes are about to get much higher for kids when the Trump administration releases its fiscal year 2019 budget. Trump will likely propose deep cuts to nutrition assistance; last year's budget cut SNAP benefits by nearly 30 percent. And despite opposition from two-thirds of Americans, congressional Republican lawmakers are already chomping at the bit to help. For kids whose families struggle to put food on the dinner table, that means the cafeteria lunch line may become a lifeline.
* Calculation is based on study's report of a total real program cost per student of $3,080 over nine years, and an estimated benefit-cost ratio of seven compared to lifetime earnings (that is, earnings between ages 21 and 65) for students in the bottom quartile of household income. Figures representing dollar-value changes in lifetime earnings are based on the study's calculations, which use the Swedish rather than the US distribution of income and earnings.
** In 2017, an average of 20 million students in primary and secondary schools received free lunch from the National School Lunch Program (NSLP) during each non-summer month. The total federal cost of the program was just over $13.6 billion, of which approximately $10.9 billion went toward reimbursements to schools for free lunches -- an average per-participant cost of about $546 for the school year. If all 35.9 million additional schoolchildren in prekindergarten through twelfth grade at schools tracked by the National Center for Education Statistics (which captures all local public school systems and most private schools) were to participate in a newly offered free lunch program to the same extent as the current 20 million participants, the additional federal costs for reimbursements to schools would be about $19.6 billion per year. However, this likely represents an overestimate because many students prefer to bring lunch from home some or all of the time, and the newly eligible students -- whose families tend to have higher incomes -- may have more resources to do so.