WASHINGTON – Since the early 1990s, crime rates have generally been falling in the United States.
In particular, there has been a big drop in the incidence of robbery, burglary and larceny. Why?
New research suggests an unexpected factor. In the 1990s, the federal government started requiring states to deliver welfare benefits through the new Electronic Benefit Transfer system instead of paper checks. EBT allowed beneficiaries to get their money via debit cards – meaning a big reduction of cash on the street and, as a result, significantly lower crime rates.
The research, conducted by University of Missouri criminologist Richard Wright and his colleagues, focuses on crime rates in Missouri from 1990 to 2011. The researchers exploited the fact that the EBT program was implemented in eight phases in different localities from June 1997 to May 1998. The variations in the implementation dates enabled Wright and his co-authors to isolate the program’s effects.
Wright and his colleagues asked two major questions: 1) Did crime fall after the introduction of the EBT system? 2) Did income-generating offenses fall more than other offenses, such as rape?
The answer to both questions turns out to be yes.
The big news is that EBT’s implementation helped reduce the overall crime rate by 9.8 percent. That translates into a decrease of 47 crimes per 100,000 per county per month. Income-generating crimes were the main source of the decrease, with burglary, larceny and assault falling by 7.9 percent, 9.6 percent and 12.5 percent, respectively.
One might speculate that these results are driven by an increase in arrests, not by the EBT program. If police are arresting more people, crime rates should go down. But Wright and his co-authors specifically tested for changes in arrest levels – and found large decreases there as well, thus fortifying their conclusion that the EBT program is reducing crime.
By contrast, implementation of the EBT program was not associated with a statistically significant reduction in sex offenses, such as rape, prostitution and sex trafficking.
Wright and his co-authors contend that if federal and state governments, along with the private sector, took stronger steps to reduce the use of cash, the effects on street crime would be even larger.