A new paper out of NBER suggests that criminals are more likely to commit crime the longer it's been since they received their last batch of food stamps. This implies that welfare payments help to bring people over some base level of poverty whereby they find the risk of incarceration higher than the negative outcomes associated with not engaging in illegal income-generating activities.
The right has long been against welfare payments because, at least theoretically, they reduce the incentive for self-improvement and entrepreneurial activity. However, if such payments have other empirically verifiable benefits, such as crime reduction, is there a point at which even those who hate welfare the most will accept such programs as a sort of bribe to keep the poor from engaging in crime? It seems possible that if this study does indeed identify an actual causation, investments in welfare payments may be more economical than investments in greater police force or other attempts to reduce crime. Furthermore, if welfare programs reduce incarceration, the return to the economy from such payments would doubtlessly be higher than the returns to incarcerating workforce-eligible adults, even if their overall contribution to the workforce is low.
Thoughts?
Wimbledon Wisdom
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I recently ran across a graduation speech by the tennis great Roger
Federer. I especially appreciated this passage:
In the 1,526 singles matches I played...
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2 comments:
It seems to me the findings in the study are relatively predictable.
In abstract, it amounts to saying: “Individuals are budget constrained. When basic needs are not met, individuals search for means, sometimes resorting to breaking the law, to expand their budget constraint.”
It is pretty straightforward that in the short-term we should be able to give individuals money (or food stamps) to reduce the incentive to engage in unsavory income generators. This study seems supports that.
It is not at all clear to me, however, that the most effective and sustainable *long-term* strategy for expanding the average budget constraint of the less fortunate is to expand welfare. This study doesn't have much to offer to that end.
This has always been the give and take between the socialist and capitalist realties. Where is the balance between redistributing enough income to the poor so that a basic wealth level is met, yet keep the level of welfare redistributed low enough to not encourage people to leave their jobs (or more realistically decrease their production) because they are relying on our welfare system. I think the take away from this article is that the most important asset to any government is information about its constituents (that goes into a whole nother issue, but we will ignore that for this discussion). The welfare level in the state maybe appropriate, but the government may not be putting it in the right place. Further, the government may have systems in place to re-introduce those persons back into the work force, but either the government is putting the information in the wrong place, or the citizens don't know how to access it.
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