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Does Poverty Relief Spending Reduce Crime? Evidence from Argentina

A large body of theoretical empirical research suggests that welfare spending reduces crime. Contrary to this dominant finding, a few recent studies conclude that there is no relationship between several measures of welfare spending and crime. This paper contributes to the debate using data from the Unemployed Heads of Household Program (UHHP), the largest poverty alleviation program launched by the Argentinean government to cope with the deleterious effects of the 2002 crisis. Province-level dynamic panel data reveals that UHHP, featuring conditional cash transfers had a negative impact on crime, particularly on property crimes and its main categories, larceny and robbery. UHHP also diminished aggravated assault but had no influence on murder.