Revisiting Welfare Reform: Effects on Teenage Crime

In the early nineties, politicians took up the task of reforming America’s welfare system. A bipartisan effort led to the creation of an employment-focused entitlement program: The Personal Responsibility and Work Opportunity Act of 1996. Popularly known as “welfare reform”, the legislation had two basic goals: to increase financial independence of welfare beneficiaries—notably low-income single mothers—and to decrease the financial burden of the government. While the public benefits debate continues today, previous work has shown the act’s positive effects on teenage pregnancy and high school dropout rates. This most recent study adds to the current research by attempting to evaluate the impact of welfare reform on teenage drug arrests.

The authors introduce two conflicting hypotheses for the effect of welfare reform on teen crime. Under the positive hypothesis, the benefits of newly employed single mothers “trickle-down” to the next generation. Potentially, children observing a working mother would have less reliance on state-based entitlements and would experience higher returns to education. However, the alternative hypothesis predicts that teenagers have worse outcomes, such as increased drug use, when they have less connection to their mothers. This then becomes a measure of trade-offs: weighing the benefits of maternal employment over the costs of less supervision and family connection. They find small, statistically insignificant increases in arrest rates but conclude that overall, exposure to welfare reforms have no effect on teenage drug arrests.

Because welfare reform was rolled out across the country at the discretion of each state, Corman et al. were able to examine the effect of welfare implementation and resulting teen drug arrests. The discretionary adoption of the policy allowed the researchers to use a “difference-in-difference” approach in which they looked for changes in trends before and after adoption. States with later adoption served as controls for early adopters. Publicly available data from the FBI, disaggregated by age and gender, was used to track youth drug arrests. One important limitation to note is that in 1994, Congress passed the Violent Crime Control and Law Enforcement Act. With the concurrent implementation of welfare and justice reform, it is difficult to isolate the overlapping impact of one reform effort from another. The authors attempt to control for these overlaps in their regression by including controls on law enforcement spending, state-level economic indicators and arrest rates of non-juveniles, among others.

To contextualize the teen drug problem in America, the authors provide a basic overview of drug arrests from 1990-2005. Over this period, the substantial discrepancy between rates of male and female arrests shows that this is predominantly a teenage male problem. Next, Corman et al. analyze teen drug arrests before and after welfare reform. Using adult arrest rates as a benchmark, the findings show that before states rolled out welfare reform, the rate of drug arrests by men ages 25-29 was higher than that of men ages 15-17 years old. However, those rates reversed after welfare reform, and arrests of younger men increased at a faster rate.

This research introduces a serious debate on the merits and limitations of welfare reform. Any attempt to change entitlement programs should be met, as exhibited by the authors of this study, with a strong grasp of theory from a multi-dimensional perspective. Finally, our inability to differentiate the effects of segmented welfare and justice reform in the nineties should serve as a lesson for future policy makers. To avoid creating unintended consequences for the next generation, leaders should seek to address complex problems through coordinated, systematic interventions.

Article source: Corman, Hope, Dhaval Dave, Ariel Kalil, and Nancy Reichman. “Effects of Maternal Work Incentives on Teen Drug Arrests.” Advances in Health Economics and Health Services Research 25. (2017): 111–142.

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