Reconsidering the Relationship Between Welfare Spending and Serious Crime: A Panel Data Analysis with Implications for Social Support Theory

Several researchers have found an inverse relationship between welfare spending and serious crime. With few exceptions, these findings have been based on cross‐sectional designs, single measures of welfare spending, and few indicators of crime. In response to these limitations, the relationship between welfare spending and crime was reconsidered using panel data from California counties. Fixed‐effects regressions revealed virtually no relationship between several measures of welfare spending and five types of serious crime: (1) homicide; (2) robbery; (3) assault; (4) burglary; and (5) larceny. The estimates were resistant to numerous robustness checks and alternative specifications. The most plausible explanation for the findings is that heterogeneity was not controlled for in previous studies. Implications for social support theory are discussed.