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Welfare cuts and crime: Evidence from the New Poor Law

Welfare cuts and crime: Evidence from the New Poor Law

548/2021 Eric Melander and Martina Miotto
working papers,economic history

548/2021 Eric Melander and Martina Miotto

The New Poor Law reform of 1834 induced dramatic and heterogeneous reductions in welfare spending across English and Welsh counties. Using the reform in a difference-in-differences instrumental variables strategy, we document a robust negative relationship between the generosity of welfare provision and criminal activity. Results are driven by non-violent property crimes and are stronger during months of seasonal agricultural unemployment, indicating that a combination of welfare cuts and precarious work opportunities lowered the opportunity cost of crime for economically vulnerable individuals. We use data on county police forces and individual-level criminal records to rule out alternative mechanisms related to changes in policing and sentencing.

Economic History