Welfare Programs and Crime Spillovers
By David Jinkins, Elira Kuka, Claudio Labanca
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.
IZA DP No. 17958
Bonn: IZA – Institute of Labor Economics , 2025. 85p.