Does the Absence of Cash Help Cut Crime?

A new working paper (abstract; ungated PDF not available) by Richard Wright, Erdal Tekin, Volkan Topalli, Chandler McClellan, Timothy Dickinson, and Richard Rosenfeld analyzes the effects of delivering welfare benefits via Electronic Benefit Transfer (EBT) instead of checks (which are easily converted to crime-fueling cash):

It has been long recognized that cash plays a critical role in fueling street crime due to its liquidity and transactional anonymity. In poor neighborhoods where street offenses are concentrated, a significant source of circulating cash stems from public assistance or welfare payments. In the 1990s, the Federal government mandated individual states to convert the delivery of their welfare benefits from paper checks to an Electronic Benefit Transfer (EBT) system, whereby recipients received and expended their funds through debit cards. In this paper, we examine whether the reduction in the circulation of cash on the streets associated with EBT implementation had an effect on crime. To address this question, we exploit the variation in the timing of the EBT implementation across Missouri counties. Our results indicate that the EBT program had a negative and significant effect on the overall crime rate as well as burglary, assault, and larceny. According to our point estimates, the overall crime rate decreased by 9.8 percent in response to the EBT program. We also find a negative effect on arrests, especially those associated with non-drug offenses. EBT implementation had no effect on rape, a crime that is unlikely to be motivated by the acquisition of cash. Interestingly, the significant drop in crime in the United States over several decades has coincided with a period of steady decline in the proportion of financial transactions involving cash. In that sense, our findings serve as a fresh contribution to the important debate surrounding the factors underpinning the great American crime decline.


Very clever study!
I wonder if there's a correlated increase in non-cash crime (e.g. how many people in the EBT program became fraud victims).


Nobody in the UK uses checks any more... nobody gets paid by check (or cheque as we quaintly call it).

I've written about 4 checks in the last 5 years (to small charities without e-banking). I had to be reminded how to write the last one....

A puzzle why USA still has them...

Oliver H

Amen. When I moved to the US in 1999, I was already baffled about paying sundry bills with checks and more, having to think about paying them every month, instead of simply having the money for rent, power, phone etc. being deducted automatically.

Completely baffled that so little has changed...

Shane L


I wonder how much cash crime is opportunistic? Perhaps troublesome individuals or gangs took advantage of situations as they arose to do impulsive crimes.

I ask because I wonder how aware criminals were about the decline of cash and its impact on their activities. If crimes were mostly opportunistic, there would simply be fewer opportunities and they might not have been very aware of the change. If, though, crimes were planned and organised then criminals might be aware that they were entering hard times as the incomes they relied on from property crimes dwindled.


This abstract should serve as a prime example of how irresponsible it is to draw causal conclusions from correlational relationships. There are just so many other factors at play. Take policing, for example. Both public and private policing strategies have changed markedly over the past several decades, as have the technologies available to law enforcement. Demography is another factor. During the 1960s and 1970s, the large number of teens and young adults in the Baby Boom cohort drove crime rates higher. From a more long-term perspective, historical evidence amassed by respected scholars shows rather convincingly that personal violent crime began declining in Western nations as early as the sixteenth century. While this research has emphasized violent crimes, similar processes may hold for crime more generally. Perhaps the rising crime rate from WWII through the early 1990s was simply a small spike that temporarily obscured a much longer downward trend. An influx of new immigrants might also have contributed to lower crime rates. So there's a whole lot more to consider than EBTs where the trends behind these crimes are concerned.



This study also has implications for the large amounts of unbanked and underbanked communities in America. The less cash (aka check-cashing establishments) and more mainstream financial transactions, the less crime. This is why sheriffs in big cities like Dallas have wholeheartedly supported the "BankOn" initiative, that strives to steer folks away from costly check-cashing establishments not just because it's better for them financially but because it reduces the number of easy targets walking around with hundreds of dollars in cash.


What societies like Japan which is has an almost all cash economy and also has one of the lowest crime rates in the world?


Sorry "What about societies ... Which has ...


A large percentage of the people who receive their benefits electronically (direct) deposited into bank accounts immediately take that money out in cash, either from a branch, or through successive ATM withdrawals. (I know this because I work for a bank, and I see their accounts )

Marty B. O'Malley

"Our results indicate that the EBT program had a NEGATIVE and significant effect on the overall crime rate." While that statement is technically correct, it is misleading. In fact the policy had the DESIRED effect of decreasing crime.