Health & Human Services

Study: Welfare Debit Cards Linked to Drop in Crime

March 26, 2014
 

A new study has found that paying welfare benefits via debit card, rather than cash, caused a 10 percent drop in crime.

Researchers have long noted that cash plays a critical role in street crime, due to its liquidity (it's easy to access and everyone accepts it) and anonymity (it leaves no paper trail). In poorer neighborhoods, public assistance payments used to be a significant source of circulating cash: recipients would cash their assistance checks at the bank, pocketing the money and making them attractive targets for criminals.

But starting in the 1990s that changed, as the Federal government gradually phased out paper welfare checks in favor of electronic debit cards (the Electronic Benefit Transfer (EBT) program). Along with a team of researchers, Richard Wright of the University of Missouri studied the effects of this change in his home state and found that it was directly responsible for a hefty 10 percent drop in the overall crime rate there.

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