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Conditional Cash Transfers and Crime: Higher Income but also Better Loot

Author

Listed:
  • Fernando Borraz

    () (Facultad de Ciencias Sociales-Universidad de la República and Universidad de Montevideo)

  • Ignacio Munyo

    () (IEEM - Universidad de Montevideo)

Abstract

We quantify the effect of conditional cash transfer programs on crime. We find a positive correlation between welfare payments in cash significantly and criminal activities. We exploit the exogenous increase in the payment and the number of beneficiaries given by a major reformulation of the CCT program in Uruguay. The increase in crime is exclusively observed in property crime suggesting the impact is driven by economic reasons. Our findings suggest that an increase in cash available on the streets improves the loot from crime and thus increases the incentive for illegal activities.

Suggested Citation

  • Fernando Borraz & Ignacio Munyo, 2020. "Conditional Cash Transfers and Crime: Higher Income but also Better Loot," Economics Bulletin, AccessEcon, vol. 40(2), pages 1804-1813.
  • Handle: RePEc:ebl:ecbull:eb-20-00371
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I2-P156.pdf
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    References listed on IDEAS

    as
    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Chioda, Laura & De Mello, João M.P. & Soares, Rodrigo R., 2016. "Spillovers from conditional cash transfer programs: Bolsa Família and crime in urban Brazil," Economics of Education Review, Elsevier, vol. 54(C), pages 306-320.
    3. Fernando Borraz & Nicolás González, 2009. "Impact of the Uruguayan Conditional Cash Transfer Program," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 46(134), pages 243-271.
    4. C. Fritz Foley, 2011. "Welfare Payments and Crime," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 97-112, February.
    5. Susan Athey & Guido W. Imbens, 2006. "Identification and Inference in Nonlinear Difference-in-Differences Models," Econometrica, Econometric Society, vol. 74(2), pages 431-497, March.
    6. María Alzúa & Guillermo Cruces & Laura Ripani, 2013. "Welfare programs and labor supply in developing countries: experimental evidence from Latin America," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1255-1284, October.
    7. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597, December.
    8. Vincent Bignon & Eve Caroli & Roberto Galbiati, 2011. "Stealing to Survive: Crime and Income Shocks in 19th Century France," PSE Working Papers halshs-00623804, HAL.
    9. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 1-19.
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    More about this item

    Keywords

    Conditional cash transfers; crime; income effect; loot;

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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