Spillover Effects of Welfare Programs
April 27 @ 12:15 pm - 1:30 pm
From the University of Wisconsin-Madison Institute for Research on Poverty:
Speaker: Elira Kuka, Assistant Professor, Department of Economics, George Washington University
Most research on the social safety net focuses on understanding its effects on recipients and their families. Professor Kuka will examine how these effects extend beyond the family by drawing on data from a Danish policy study that drastically cut welfare benefits for refugees, leading to increased property crime for the affected refugees. The study design links refugees to their neighbors, and shows large increases in property crime among non-Danish neighbors—who likely interacted more with the refugees—and no effects on Danish neighbors. Results suggest that the marginal value of public funds (MVPF) is much larger when considering spillover effects, and that optimal welfare calculations should take into account these effects.