Welfare Programs and Crime Spillovers

David Carson Jinkins (), Elira Kuka () and Claudio Labanca ()
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David Carson Jinkins: Copenhagen Business School
Elira Kuka: George Washington University
Claudio Labanca: Monash University

No 17958, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: welfare programs; crime; spillovers (search for similar items in EconPapers)
JEL-codes: I38 K42 (search for similar items in EconPapers)
Date: 2025-06
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