Abstract

http://ssrn.com/abstract=2413344
 


 



Less Cash, Less Crime: Evidence from the Electronic Benefit Transfer Program


Richard Wright


University of Missouri at Saint Louis

Erdal Tekin


Georgia State University - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Volkan Topalli


Georgia State University

Chandler McCellan


Georgia State University - Department of Economics

Timothy Dickinson


Paul, Hastings, Janofsky & Walker, LLP

March 2014

NBER Working Paper No. w19996

Abstract:     
It has been long recognized that cash plays a critical role in fueling street crime due to its liquidity and transactional anonymity. In poor neighborhoods where street offenses are concentrated, a significant source of circulating cash stems from public assistance or welfare payments. In the 1990s, the Federal government mandated individual states to convert the delivery of their welfare benefits from paper checks to an Electronic Benefit Transfer (EBT) system, whereby recipients received and expended their funds through debit cards. In this paper, we examine whether the reduction in the circulation of cash on the streets associated with EBT implementation had an effect on crime. To address this question, we exploit the variation in the timing of the EBT implementation across Missouri counties. Our results indicate that the EBT program had a negative and significant effect on the overall crime rate as well as burglary, assault, and larceny. According to our point estimates, the overall crime rate decreased by 9.8 percent in response to the EBT program. We also find a negative effect on arrests, especially those associated with non-drug offenses. EBT implementation had no effect on rape, a crime that is unlikely to be motivated by the acquisition of cash. Interestingly, the significant drop in crime in the United States over several decades has coincided with a period of steady decline in the proportion of financial transactions involving cash. In that sense, our findings serve as a fresh contribution to the important debate surrounding the factors underpinning the great American crime decline.

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Number of Pages in PDF File: 48

working papers series


Date posted: March 24, 2014  

Suggested Citation

Wright, Richard and Tekin, Erdal and Topalli, Volkan and McCellan, Chandler and Dickinson, Timothy, Less Cash, Less Crime: Evidence from the Electronic Benefit Transfer Program (March 2014). NBER Working Paper No. w19996. Available at SSRN: http://ssrn.com/abstract=2413344

Contact Information

Richard Wright (Contact Author)
University of Missouri at Saint Louis ( email )
St Louis, MO
United States
Erdal Tekin
Georgia State University - Department of Economics ( email )
University Plaza
Andrew Young School of Policy Studies
Atlanta, GA 30303
United States
404-651-3968 (Phone)
404-651-4985 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Volkan Topalli
Georgia State University ( email )
35 Broad Street
Atlanta, GA 30303-3083
United States
Chandler McClellan
Georgia State University - Department of Economics ( email )
P.O. Box 3992
Atlanta, GA 30302-3992
United States
Timothy Dickinson
Paul, Hastings, Janofsky & Walker, LLP ( email )
875 15th Street, N.W.
Washington, DC 20005
United States
Feedback to SSRN


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