Center for Policy Research
Working Paper
Paying for Free Lunch: The Impact of CEP Universal Free Meals on Revenues, Spending, and Student Health
Michah W. Rothbart, Amy Ellen Schwartz & Emily Gutierrez
C.P.R. Working Paper 227
March 2020
Abstract
The Community Eligibility Provision (CEP) of the Healthy, Hunger-Free Kids Act of 2010 allows school districts to provide free meals to all students if more than 40 percent of students are individually eligible for free or reduced-price lunch. While emerging evidence documents positive effects on student behavior and academics (Gordon and Ruffini, 2019; Schwartz and Rothbart, 2020), critics worry that Universal Free Meals (UFM) has unintended consequences, including exacerbating student obesity and adding financial burden onto school districts.
The authors use school and district level data from New York State (NYS) and a difference-in-differences design to test whether concerns over negative effects for district finances (both revenues and expenditures) and student weight are justified. The authors exploit the staggered adoption of CEP across NYS school districts, and explore differences between metro, town, and rural districts. They delve into potential mechanisms, such as lunch and breakfast participation, and use a non-parametric event study model to assess pre-adoption trends and dosage effects. They find that, while local food service revenues decline, as expected, Federal dollars more than compensate through increased reimbursement revenues. Districts increase total food expenditures after CEP adoption (consistent with serving more meals) but spend less per meal. Indeed, while some worry that expanding free meals will crowd out education spending, the authors find CEP has no effect on instructional expenditures.
Furthermore, while CEP increases participation in school lunch and breakfast, there is no deleterious effect on obesity, but, instead, some evidence of decreases in obesity in secondary grades. Rural districts experience larger impacts on revenues, expenditures, and student obesity than both metro and town districts, suggesting rural locations might be the most responsive to CEP. Unlike other districts, however, rural districts experience a food service funding gap from the CEP.