Does emergency financial assistance reduce crime?

Does emergency financial assistance reduce criminal behavior among those experiencing negative shocks? To address this question, we exploit quasi-random variation in the allocation of temporary financial assistance to eligible individuals and families that have experienced an economic shock. Chicago’s Homelessness Prevention Call Center (HPCC) connects such families and individuals with assistance, but the availability of funding varies unpredictably. Consequently, we can determine the impact of temporary assistance on crime by comparing out-comes for those who call when funds are available to those who call when no funds are available. Linking this call center information to arrest records from the Chicago Police Department, we find some evidence that total arrests fall between 1 and 2 years after the call. For violent crime, police arrest those for whom funds were available 51%less often than those who were eligible but for whom no funds were available. Single individuals drive this decrease. The decline in crime appears to be related, in part, to greater housing stability—being referred to assistance significantly decreases arrests for homelessness-related, outdoor crimes such as trespassing. However, we also find that financial assistance leads to an increase in property crime arrests. This increase is evident for family heads, but not single individuals; the increase is mostly due to shoplifting; and the timing of this increase suggests that financial assistance enables some families to take on financial obligations that they are subsequently unable to meet. Overall, the change in the mix of crime induced by financial assistance generates considerable social benefits due to the greater social cost of violence.

Read More »