Unanticipated Effects of Electronic Benefits Transfer on WIC Stores and Redemptions: Evidence From Administrative Data on Vendors

We evaluate the effects of the nationwide transition in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) from paper vouchers to Electronic Benefit Transfer (EBT) cards on store decisions to seek authorization to accept WIC benefits. We combine novel administrative data from “The Integrity Profile” (USDA administrative data on stores participating in WIC and their WIC reimbursements) with new nationwide policy data on WIC EBT implementation. Using a staggered adoption difference‐in‐differences approach, we find that the transition had heterogeneous and occasionally unanticipated effects across states. The number of WIC‐authorized independent vendors declined 10% following WIC EBT implementation. We find no significant effect of WIC EBT implementation on WIC redemptions in a subset of ZIP codes with sufficient vendors for data sharing. Vendors in states that were early adopters of WIC EBT have more negative effects on the probability of WIC authorization, which may be due to learning effects or improvements in technology over time. Past experience with EBT implementation by financial services providers hired by states to help them implement WIC EBT processing (processors) reduces the magnitude of these negative effects of EBT implementation on store participation in WIC.