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Welfare Checks, Drug Consumption, and Health: Evidence from Vancouver Injection Drug Users

  • Chris Riddell
  • Rosemarie Riddell

This paper investigates the link between welfare payments and drug use among injection drug users. We find an increase in the likelihood of an overdose in the days following check arrival, and in the probability of leaving the hospital against medical advice (AMA) on check day. Using the check arrival date as an instrument, we estimate the Local Average Treatment Effect of leaving AMA on subsequent readmission and the probability of a drug overdose. The results indicate that, for individuals influenced by check day, leaving AMA leads to readmission much sooner than planned discharge, longer subsequent stays in the hospital, and a substantial increase in the probability of a drug overdose.

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Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 41 (2006)
Issue (Month): 1 ()

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Handle: RePEc:uwp:jhriss:v:41:y:2006:i:1:p138-161
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  1. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
  2. Melvin Stephens Jr., 2002. "'3rd of tha Month': Do Social Security Recipients Smooth Consumption Between Checks?," NBER Working Papers 9135, National Bureau of Economic Research, Inc.
  3. James Heckman, 1997. "Instrumental Variables: A Study of Implicit Behavioral Assumptions Used in Making Program Evaluations," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 441-462.
  4. Jonathan A. Parker, 1999. "The Reaction of Household Consumption to Predictable Changes in Social Security Taxes," American Economic Review, American Economic Association, vol. 89(4), pages 959-973, September.
  5. Wilcox, David W, 1989. "Social Security Benefits, Consumption Expenditure, and the Life Cycle Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 288-304, April.
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