Welfare Programs and Crime Spillovers

David Jinkins, Elira Kuka and Claudio Labanca

No 33926, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Research on the social safety net examines its effects on recipients and their families. We show that these effects extend beyond recipients’ families. Using a regression discontinuity design and administrative data, we study a Danish policy that cut welfare benefits for refugees, increasing crime among affected individuals. Linking refugees to neighbors, we find increased crime among non-Danish neighbors, with spillovers persisting even after direct effects stabilize. Accounting for these spillovers raises the marginal value of public funds by 20%. We explore several mechanisms and find evidence consistent with peer effects among young individuals from the same country of origin.

JEL-codes: I38 K42 (search for similar items in EconPapers)
Date: 2025-06
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