EFFECTS OF WELFARE REFORM ON ILLICIT DRUG USE OF ADULT WOMEN

Authors

  • HOPE CORMAN,

    1. Corman: Department of Economics, Rider University, Lawrenceville, NJ 08648 and National Bureau of Economic Research, Cambridge, MA 02138. Phone 609-895-5559, Fax 609-896-5387, E-mail corman@rider.edu
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  • DHAVAL M. DAVE,

    1. Dave: Department of Economics, Bentley University, Waltham, MA 02452 and National Bureau of Economic Research, Cambridge, MA 02138. Phone 781-891-2268, Fax 212-817-1597, E-mail ddave@bentley.edu
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  • DHIMAN DAS,

    1. Das: National University of Singapore, Asia Research Institute, 469A Tower Block #10-01, Bukit Timah Road, Singapore 259770. Phone (65) 6516 6294, Fax (65) 6779 1428, E-mail aridd@nus.edu.sg
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  • NANCY E. REICHMAN

    1. Reichman: Department of Pediatrics, Robert Wood Johnson Medical School, New Brunswick, NJ 08903. Phone 732-235-7977, E-mail nancy.reichman@gmail.com
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    • This project was funded in part by the National Institute of Child Health and Human Development (Grant #R01HD060318). We are grateful for helpful comments from Sandy Decker, Jeremy Arkes, Dan Rees, Susan Averett, Ilene Goldberg, and seminar participants at the University of Iceland; and for valuable research assistance from Oliver Joszt.


Abstract

Exploiting changes in welfare policy across states and over time and comparing relevant population subgroups within an econometric difference-in-differences framework, we estimate the effects of welfare reform on adult women's illicit drug use from 1992 to 2002, the period during which welfare reform unfolded in the United States. The analyses are based on all available and appropriate national data sets, each offering unique strengths and measuring a different drug-related outcome. We investigate self-reported illicit drug use (from the National Household Surveys on Drug Abuse and National Surveys on Drug Use and Health), drug-related prison admissions (from the National Corrections Reporting Program), drug-related arrests (from Federal Bureau of Investigation Uniform Crime Reports), and drug-related emergency department episodes (from the Drug Abuse Warning Network). We find robust evidence that welfare reform led to a 10%–21% decline in illicit drug use among women at risk of relying on welfare, as well as associated declines in drug-related arrests (6%–7%), drug-related hospital emergency department episodes (7%–11%), and possibly drug-related prison admissions (11%–19%). The findings indicate that an appropriately designed welfare system with sufficient job opportunities for those who are able to work can result in both increases in employment and decreases in drug use. (JEL I38, K42, J21)

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