New study shows welfare prevents crime, quite dramatically

This has been well known for a century, maybe longer.   People who have nothing, who are hungry, cold, hopeless will do whatever they can to get what they need, even crime.   Let’s give them another way, we can easily afford it in this country if we stop robbing the public to funnel the money to the wealthy.   Hugs

A new paper in the Quarterly Journal of Economics, published by Oxford University Press, indicates that removing cash welfare from children when they reach age 18 greatly increases the chances that they will face criminal justice charges in subsequent years.  

Supplemental Security Income is a United States program that provides payments to people with disabilities who have low incomes. Children qualify for the program based on their disability status and their parents’ low income and assets. Until 1996 children automatically continued to qualify for the adult program when they reached 18 years old unless their incomes increased.

As part of changes made to US social welfare programs in 1996 the US Social Security Administration began to reevaluate children receiving SSI when they turned 18 using different, adult, medical eligibility criteria. The Social Security Administration began removing about 40% of children receiving benefits when they turned 18. This process disproportionately removes children with mental and behavioral conditions such as attention-deficit/hyperactivity disorder.

Using data from the Social Security Administration and the Criminal Justice Administrative Records System researchers estimated the effect of losing Supplemental Security Income benefits at age 18 on criminal justice and employment outcomes over the next two decades. By comparing records of children with an 18th birthday after the date of welfare reform enactment on August 22, 1996, and those born earlier (who were allowed onto the adult program without review) the researchers were able to estimate the effect of losing benefits on the lives of the affected youth.

They found that terminating the cash welfare benefits of these young adults increased the number of criminal charges by 20% over the next two decades. The increase was concentrated in what the authors call “income-generating crimes,” like theft, burglary, fraud/forgery, and prostitution. As a result of the increase in criminal charges, the annual likelihood of incarceration increased by 60%. The effect of this income removal on criminal justice involvement persisted more than two decades later.

The researchers found that the impact of the change was heterogeneous. While some people removed from the income support program at age 18 responded by working more in the formal labor market, a much larger fraction responded by engaging in crime to replace the lost income. In response to losing benefits, youth were twice as likely to be charged with an illicit income-generating offense than they were to maintain steady employment.

While each person removed from the program in 1996 saved the government some spending on SSI and Medicaid over the next two decades, each removal also created additional police, court, and incarceration costs. Based on the authors’ calculations, the administrative costs of crime alone almost eliminated the cost savings of removing young adults from the program.

“Traditionally, economists talk about the income effects of welfare programs in the context of the formal labor market—that welfare discourages work,” said the paper’s authors, Manasi Deshpande and Michael Mueller-Smith. “What we find is that the income effect of welfare benefits can also manifest as reductions in criminal activity. In fact, in the SSI context, cash welfare has a much larger discouragement effect on criminal activity than it does on formal work.”

The paper “Does Welfare prevent crime? The criminal justice outcomes of youth removed from SSI” is available (at midnight on June 7th) at:

Direct correspondence to: 
Manasi Deshpande
University of Chicago Department of Economics 
Saieh Hall for Economics 347 
1126 East 59th Street 
Chicago, IL 60637                                                                                                                                

To request a copy of the study, please contact:
Daniel Luzer

4 thoughts on “New study shows welfare prevents crime, quite dramatically

    1. Hello Ali. Plus it will be needed as more jobs become automated. Way back in the 1980s the future looking people said jobs would be shared, three or four people doing the same job a few hours a day or one day a week. There will not be enough jobs. So people need a way to live a comfortable quality life without a job. And if we get rid of the idea that a person’s value is their job and that somehow people that don’t give their entire life to their bosses are somehow unworthy of living. I wish the people in the US could see how much better the quality of is in other countries. I don’t get the blindness of some people, mostly on the right have never thought that other people live better in other countries. The US is a wealthy country where most of the people live like a poor country. Hugs

      Liked by 1 person

  1. Unfortunately and regrettably, until a person has experienced the described conditions, they have absolutely NO empathy or understanding of how these people live. TOO MANY that make decisions for “the rest of us” sit in ivory towers and are untouched by the actual pain and suffering of the less fortunate.

    Liked by 2 people

    1. Hello Nan. So true, and so scary as more wealth moves to the upper levels of income. People don’t understand what that means “more wealth moves to the upper levels”. It means more money for the top level and it is locked away from public flow, which means a lot less money flowing in the country among the people. It means the people get poorer. The economy is the flow of money between the public buying and selling and working to move that money by buying and selling. That is the economy of a country. In other advanced countries that restrain capitalism they keep a lot of the money flow in the public at a lower level. It creates a better quality of life for the people. In the US unrestrained capitalism since the 1980s has moved more and more of that money to the upper level that locks it away, so there is not an easy flow of money, so that the flow of the money is restricted. That causes inflation, it causes economies to crash, it causes hardship to the people. We have seen it in strongarm dictatorships that the dictator takes all the country’s money and secrets it away, the people fall into despair having nothing. I never thought the US would go the way of the Marcos Philippines, the Iran Shaw Mohammad Reza Pahlavi, Saddam Hussein, and other rulers that took all the money for themselves. If you want to look closer to our own past think of the European kings that fell after taking too much of the country’s money for themselves, leaving the people of the country desperate. Hugs

      Liked by 2 people

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