Welfare Payments and Crime
This paper tests the hypothesis that the timing of welfare payments affects criminal activity. Analysis of daily reported incidents of major crimes in twelve U.S. cities reveals an increase in crime over the course of monthly welfare payment cycles. This increase reflects an increase in crimes that are likely to have a direct financial motivation like burglary, larceny-theft, motor vehicle theft, and robbery, as opposed to other kinds of crime like arson, assault, homicide, and rape. Temporal patterns in crime are observed in jurisdictions in which disbursements are focused at the beginning of monthly welfare payment cycles and not in jurisdictions in which disbursements are relatively more staggered.
I thank Jeff Cronin, Linnea Meyer, and Janelle Prevost for excellent research assistance and police departments in 12 cities for providing data. Seminar participants at the American Law and Economics Association Annual Meeting, Harvard University, the NBER Law and Economics Program Meeting, Wesleyan University, and Yale Law School and numerous others provided very helpful comments. The Division of Research at Harvard Business School provided generous funding. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Fritz Foley. "Welfare Payments and Crime." Review of Economics and Statistics, 93, no. 1 (February 2011): 97-112.