Welfare can discourage crime more than it discourages work

In recent decades, many governments have attempted to encourage people into work by reducing welfare eligibility. By analyzing the changes in the American Supplemental Security Income program (SSI) policies, Manasi Deshpande and Michael Mueller-Smith find that rather than incentivizing people into employment, removing welfare support instead may push them towards illicit activities to make up for lost income. This increase in criminal activity and subsequent incarceration has large monetary and social costs for society, which effectively cancel out the savings to government from reduced welfare spending.