When bank robber Willie Sutton was asked why he robbed banks, he is (mis)quoted as having said, “Because that’s where the money is.” Turns out that is also why there is more street crime in poorer neighborhoods: because that’s where the cash is. Or at least it’s where the case was.
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 stemmed from public assistance or welfare payments. But starting in the 1990s that changed, as the Federal government gradually phased out paper welfare checks in favor of electronic debit cards (the Electronic Benefit Transfer [EBT] program).
A team of researchers studied the effects of this change in Missouri and found that it was directly responsible for a hefty 10 percent drop in the overall crime rate:
The authors ran some more robust regression analysis and found that “burglary, assault, and larceny decreased by 7.9 percent, 12.5 percent, and 9.6 percent, respectively.” To double-check their work, they looked at arrest rates and found that corresponding drops in arrest rates supported their findings. They also looked at the incidence of rape, which showed little change pre- and post-EBT switch. Because rape is “typically unrelated immediate acquisition of cash,” this e as a surprise.
To put these results in perspective, the overall 10 percent decrease in crime corresponded to 47 fewer crimes per 100,000 people per county per month as a direct result of switching welfare benefits from cash to credit. This finding is fairly astonishing and raises some interesting questions.
As this research seems to show, the ability to carry money in an electronic form (such as debit cards) rather than in cash can help reduce theft-based crimes. We don’t often think of access to banking as a “law and order” issue, but perhaps it’s time we did. For most of us, electronic debit cards are a convenience, but for our more economically vulnerable neighbors it could be a matter of public safety.