Does Poverty Relief Spending Reduce Crime? Evidence from Argentina

Abstract:     
A large body of empirical research suggests that welfare spending reduces crime. Contrary to this dominant finding, a few recent studies conclude that there is no relationship between several measures of welfare spending and serious crime. This paper contributes to the debate using data from the Unemployed-Headed Household Program (UHHP), the largest poverty alleviation program launched by the Argentinean government to cope with the deleterious effects of the 2002 crisis. Province-level dynamic panel data reveals that UHHP, featuring cash transfers, had a negative impact on crime although the effect was rather weak. The analyses of various types of crime show that the influence of UHHP was greater in Property Crimes than Crime against Persons, with the highest effect on larceny.

Keywords: Crime, Welfare Spending, Dynamic Panel Data, Argentina

JEL Classification: K4, I3, D72, P16

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