ISSN 1936-5349 (print)
ISSN 1936-5357 (online)

HARVARD
JOHN M. OLIN CENTER FOR LAW, ECONOMICS, AND BUSINESS

DOES PUBLIC ASSISTANCE REDUCE RECIDIVISM?
Crystal S. Yang

Published in American Economic Review: Papers and Proceedings, Vol. 107, No. 5 (2017)

Discussion Paper No. 920
06/2017
Harvard Law School
Cambridge, MA 02138

This paper can be downloaded without charge from:The Harvard John M. Olin Discussion Paper Series:
http://www.law.harvard.edu/programs/olin_center

American Economic Review: Papers & Proceedings 2017, 107(5): 551–555
https://doi.org/10.1257/aer.p20171001

Does Public Assistance Reduce Recidivism?†
By Crystal S. Yang*

America’s War on Drugs has led to the incarceration of millions of individuals for drug-related offenses. Today, approximately half amillion individuals are incarcerated for a drug
conviction, a ten-fold increase from 1980
(Mauer and King 2007). Drug offenders represent 16 percent of inmates in state prisons andhalf of all inmates in federal prison (Carson
2014).
Even after incarceration, many drug offenders continue to be punished through the federal lifetime ban on public assistance. Section
115 of the Personal Responsibility and Work
Opportunity Reconciliation Act (PRWORA) of
1996 imposed a lifetime ban on both welfare
benefits and food stamps to any individual convicted of a state or federal felony involving “thepossession, use or distribution of a controlled
substance” for conduct occurring after August22, 1996 (P. L. 104–93). Debated for only two
minutes and adopted by unanimous consent, thislifetime ban was passed on the notion that “if weare serious about our drug laws, we ought not togive people welfare benefits who are violating
the Nation’s drug laws” (Senator Phil Gramm,
R-TX).
However, Section 115 also allowed states topass laws opting out of the federal ban. Since
1996, over 30 states have adopted legislationthat fully or partially opts out of the federal ban,restoring eligibility for drug felons. A primaryargument used by advocates for restoring eligibility is that prohibitions on public assistanceincrease the chances of re-offending by making
it more difficult for ex-offenders to make ends

meet. Indeed, existing evidence suggests that theban had a first-order effect on limiting accessto public assistance. For example, according
to a Government Accountability Office report,
among offenders released in 2001, 15 percent ofotherwise eligible drug felons were barred fromwelfare and 25 percent barred from food stamps(GAO 2005). Another estimate suggests thatbetween 1997 and 2002, states removed at least
92,000 adults with felony drug convictions fromthe welfare rolls (Gustafson 2009).
In this paper, I provide the first set of estimates on the impact of public assistance eligibility on return to prison using administrative
data on released offenders in 43 states. I exploit
the timing of the federal public assistance banunder PRWORA of 1996, and timing of statelaws that opted out of the federal ban. I also
take advantage of the fact that the federal welfare and food stamp ban applied exclusively
to ex-offenders with drug felony convictions.
Using a ­triple-differences research design, I findthat eligibility for welfare and food stamps at
the time of release significantly reduces the riskof returning to prison within one year by up to
10 percent. These findings are largely consistent
with prior work finding that economic factors
affect reentry (e.g., Holzer, Raphael, and Stoll
2003; Travis 2005; Harding et al. 2014), in particular labor market opportunities at the time ofrelease (e.g., Sabol 2007; Raphael and Weiman
2007; Schnepel 2016; Yang 2016).
I. Data and Background

National Corrections Reporting Program.—
Prison release and admittance data are fromthe National Corrections Reporting Program(NCRP). These data are constructed using
administrative corrections and parole data voluntarily provided by states. Within each state,
records of prisoners are linked using inmate
ID numbers, and demographic and crime characteristics. The data include rich offender* Harvard Law School, 1585 Massachusetts Avenue,
Cambridge, MA 02138 (e-mail: cyang@law.harvard.edu).
I am very grateful to Will Dobbie and Michael MuellerSmith for helpful comments and suggestions. Molly Bunke
and Colin Doyle provided excellent research assistance. Allerrors are my own.
†
Go to https://doi.org/10.1257/aer.p20171001 to visit thearticle page for additional materials and author disclosurestatement.
551

552

MAY 2017

AEA PAPERS AND PROCEEDINGS

c­haracteristics: age, race, Hispanic ethnicity,
highest grade completed, gender, prior felony
incarceration, offense of conviction, convicted
counts, total sentence, time served, type ofprison, reason for entering into prison, and reason for release. See Rhodes et al. (2016) andYang (2016) for additional details on the data.
For this study, I define recidivism as returnto prison within one year given that the hazard
rate of returning to prison is highest in the firstyear post-release (Yang 2016). In addition, rates
of death, risky behaviors, and food insecurity
are highest in the first few months after release(Binswanger et al. 2007, Wang et al. 2013).
I keep the first observed prison release foreach individual offender to proxy for first-timeoffenders, keep individuals who are observed
for at least a full year post-release, and drop any
observations where prison release date and stateof conviction are missing. After these sample
restrictions, the data include 4,885,754 offenders. These data consist of an unbalanced panel ofprisoners released in 43 states between 1971 and2014, with the vast majority of releases occurring between 1992 and 2014.
Table 1 reports summary statistics for both
drug and nondrug offenders in the sample. In
general, drug offenders in the sample are slightly
less likely to return to prison within one year
(16.8 percent) compared to nondrug offenders(18.9 percent). Drug offenders are more likely
to be black or Hispanic and serve less time on
average compared to nondrug offenders.
Federal and State Law Changes.—As discussed previously, the federal ban for both welfare and food stamps applied to felony drug
convictions for conduct occurring after August22, 1996. Since then, over 30 states have opted
out of the federal ban for either welfare or foodstamps. I collect and code information on allstate-level law changes and define these law
changes as either full or partial opt-outs.
Partial opt-out laws vary across states. For
example, some states partially opted out of thefederal ban by continuing to ban public assistance for individuals convicted of manufacturing
or distributing drugs, but exempting those convicted of drug possession. Other states passed
laws requiring drug treatment and testing inorder to be eligible for public assistance.
During the sample period covered by the
NCRP data, released drug felons had some

Table 1—Summary Statistics of Released Prisoners
Drug
VariableMean

Nondrug
SD

Mean

SD

Panel A. Recidivism
Return to prison in 1 year 0.168 0.374

0.189

0.392

0.540
0.382
0.177
0.888
0.112
33.597
0.530
0.387
0.066
0.012
0.180
2.290

0.498
0.486
0.382
0.316
0.316
10.636
0.499
0.487
0.248
0.109
0.384
3.382

Panel B. Offender characteristics
White
0.430
Black
0.496
Hispanic
0.222
Male
0.850
Female0.150
Age at release33.842Less HS degree
0.539
HS degree
0.388
Some college
0.060
College degree
0.008
Prior felony incarceration 0.178
1.444Time served (years)
Observations

0.495
0.500
0.416
0.357
0.357
9.850
0.498
0.487
0.237
0.089
0.383
1.722

1,431,778

3,453,976

Note: This table presents summary statistics for offenders
convicted of drug offenses and nondrug offenses.

e­ ligibility for welfare in 32 states, including full
eligibility for welfare in 16 states. Additionally,
during the sample period, released drug felons
had some eligibility for food stamps in 36 states,
including full eligibility for food stamps in 22
states. While law changes for welfare and foodstamps are highly correlated, states are relatively
more lenient toward drug felon eligibility forfood stamps compared to welfare. See online
Appendix Table A1 for information on the stateyears in the sample and for effective dates of alllaw changes. Figure A1 presents one-year recidivism trends over time and shows that recidivism
rates for drug and nondrug offenders generally
track one another, particularly prior to the federal ban.
II. Empirical Methodology

I estimate a linear probability model using a
triple-differences research design:(1)​​Y​its​​  = ​β0​ ​​  + ​β1​ ​​ ​Xi​​​  + ​β2​ ​​  Dru​gi​​​  + ​γt​​​  + ​δs​​​  + ​κst​ ​​+ ​γt​​​  × Dru​gi​​​  + ​δs​​​  × Dru​gi​​​+ ​β3​ ​​  Eli​gst​ ​​  + ​β4​ ​​  Eli​gst​ ​​  × Dru​gi​​​  + ​εits​ ​​​,
where ​​Y​its​​​ is the probability that defendant​i​released in month-year ​t​in state ​s​returns toVOL. 107 NO. 5

Does Public Assistance Reduce Recidivism?

prison within a year post-release. X​​​ i​​​ includes arich set of individual-level demographic, crime,and prison characteristics described previously,
and D​ ru​gi​​​​equals one for individuals convictedof drug offenses. I also control for state fixed
effects (​​δ​s​​​), year of release fixed effects (​​γ​t​​​), andtheir interactions with ​Dru​gi​​​​. Finally, I include
state-by-year fixed effects (​​κst​ ​​​) to account forstate-specific shocks that may be correlated withthe passage of the state laws. Standard errors are
clustered at the state-year level to account forserial correlation. In unreported results, results
are similar clustering at the state level.
​Eli​g​st​​​is an indicator equal to one if drug felons are eligible for public assistance in state s​​
and month-year ​t​. Specifically, ​Eli​gst​ ​​​ is equal
to one in state-month-years prior to the passageof PRWORA of 1996, equal to zero when thefederal ban binds, and equal to one if and whenstates passed laws opting out of the federal ban.1
In the main results, I define ​Eli​gst​ ​​​ in two ways:(i) equal to one if drug felons are eligible forpublic assistance in any form, including if a statepartially opts out of the federal ban (“any eligibility”), and (ii) equal to one if drug felons are
fully eligible for public assistance (“full eligibility”) to separately assess the impact of any
versus full eligibility.
Under this specification, the parameter ofinterest is ​​β​4​​​ , which can be interpreted as thedifferential effect of public assistance eligibility
at the time of release on the recidivism of drug
offenders compared to nondrug offenders. Thisestimate provides a causal estimate of welfare
and food stamp eligibility for drug offenders if
there are no contemporaneous shocks that affectthe relative outcomes of released drug offenders
relative to nondrug offenders in the same stateyears as the laws.
One potential concern is if these law changes
are correlated with changes in the characteristics
1

In practice, my estimates are likely downward biased
for two main reasons. First, under the federal ban, only those
who were convicted of drug-related felonies for conduct
occurring after August 22, 1996 were ineligible for public
assistance. Unfortunately, the NCRP data do not containexact offense date, so I treat all drug felons released fromprison after December 1997 as ineligible for public assistance under the federal ban given that the average time served
is approximately 1.4 years. Second, I treat all drug offenders
as affected by law changes despite the fact that many drug
offenders may not have been otherwise eligible for welfare
and food stamps in the absence of a drug conviction.

553

of released drug offenders relative to nondrug
offenders. To assess potential compositionalchanges, I combine all offender-level observablecharacteristics into a single ex ante risk index
by estimating the probability of one-year returnto prison as a function of demographic, crime,and prison characteristics. In online Appendix
Table A2, I find no significant relationshipbetween welfare and food stamp eligibility andthe predicted risk of drug offenders versus nondrug offenders, suggesting that compositionalchanges are unlikely to drive the results.
III. Results

Table 2 presents the main results. Columns
1 and 2 present results for welfare eligibility,
columns 3 and 4 present results for food stamps
eligibility, and columns 5 and 6 present results
for joint eligibility for both welfare and foodstamps. Panel A presents results for the fullsample of released offenders. Column 1 indicates that any eligibility for welfare reduces therecidivism rate of newly released drug offenders by 1.7 percentage points relative to nondrug offenders, a 10.1 percent decrease fromthe drug offender mean. Being fully eligible
for welfare decreases the recidivism rate by 1.5
percentage points for drug offenders relative
to nondrug offenders (column 2). Turning tofood stamp eligibility, I find minimal evidence
that any eligibility reduces the recidivism riskof drug offenders relative to nondrug offenders(column 3). In contrast, full eligibility for foodstamps with no restrictions has a significant
effect. Drug offenders fully eligible for foodstamps at the time of release are 2.2 percentage
points less likely to return to prison in one year
compared to nondrug offenders, a 13.1 percent
decrease from the drug offender mean.
Unsurprisingly, given these results, eligibility
for both welfare and food stamps also reduces
the risk of recidivism. Under a regime of any
eligibility for both, drug offenders are 1.3 percentage points less likely to return to prison
compared to nondrug offenders (column 5), andunder full eligibility for both, drug offenders
are 1.5 percentage points less likely to return toprison relative to nondrug offenders (column 6).
Overall, these results suggest that public assistance eligibility, in particular full eligibility,
substantially decreases recidivism among newly
released drug offenders.

554

MAY 2017

AEA PAPERS AND PROCEEDINGS
Table 2—Main Results: Return to Prison in One Year
Welfare(1)

Panel A. Full sample
Any eligibility ​×​ drug
Full eligibility ​×​ drug
Observations−0.017(0.004)
4,885,754

Panel B. Served ≤ 2 years
Any eligibility ​×​ drug
Full eligibility ​×​ drug
Observations−0.019(0.004)
3,524,163

Food stamps
(2)

(3)

−0.015(0.005)
4,885,754−0.025(0.006)
3,524,163

0.002(0.004)
4,885,754−0.003(0.004)
3,524,163(4)−0.022(0.004)
4,885,754−0.026(0.005)
3,524,163

Both(5)−0.013(0.004)
4,885,754−0.015(0.004)
3,524,163(6)−0.015(0.005)
4,885,754−0.025(0.006)
3,524,163

Notes: This table presents main OLS estimates. Each column represents a separate regression. Defendant and crime controls
include: race, ethnicity, gender, age, age squared, highest grade completed, prior felony incarceration indicator, main offense
type, number of convicted counts, total sentence imposed, type of prison admission, type of facility, reason for release, time
served, time served squared. All specifications include year of release fixed effects, state fixed effects, and state-by-year fixed
effects. Standard errors are clustered at the state-year level.

Panel B presents analogous results for asample of offenders who served no more than
two years in prison. This sample may yield
more appropriate comparisons given that drug
offenders in the sample serve substantially lesstime on average than nondrug offenders (seeTable 1). Results are very similar in this subsample. Specifically, under a regime of any eligibility for both welfare and food stamps, recently
released drug offenders are 1.5 percentage
points less likely to return to prison compared
to nondrug offenders (column 5), and under aregime of full eligibility, drug offenders are 2.5
percentage points less likely to return to prison(column 6).
Online Appendix Tables A2 and A3 present
several robustness checks. Online Appendix
Table A2 presents results using a more balanced
panel of 16 states that provided data for the
majority of the sample period. Online Appendix
Table A3 presents marginal probit and hazard
model estimates. Results are robust to thesealternative specifications.
IV. Conclusion

In this paper, I find that eligibility for welfare and food stamps significantly decreases
recidivism among newly released drug offenders, potentially because public assistance helps

ex-offenders make ends meet when othereconomic prospects are dire. Future work­
­assessing the impact of public assistance eligibility on ex-offenders and their families is essential given recent initiatives to release nonviolent
drug offenders. For instance, in 2015, more than
6,000 federal drug offenders were released early
under a re-sentencing effort for people convictedof nonviolent drug crimes, with many states following suit. The US Sentencing Commission has
also recently reduced prison terms retroactively
for certain drug offenses as part of an effort to
reduce the federal prison population.
References
Binswanger, Ingrid A., Marc F. Stern, Richard A.
Deyo, Patrick J. Heagerty, Allen Cheadle, Joann
G. Elmore, and Thomas D. Koepsell. 2007.

“Release from Prison—A High Risk of Deathfor Former Inmates.” New England Journal of
Medicine 356 (2): 157–65.
Carson, E. Ann. 2014. Prisoners in 2014. Washington, DC: United States Department of Justice.
General Accountability Office. 2005. Drug Offenders: Various Factors May Limit the Impacts
of Federal Laws That Provide for Denial of
Selected Benefits. Washington, DC: UnitedStates Government Accountability Office.

VOL. 107 NO. 5

Does Public Assistance Reduce Recidivism?

Gustafson, Kaaryn. 2009. “Criminal Law: The

Criminalization of Poverty.” Journal of Criminal Law and Criminology 99 (3): 643–716.

Harding, David J., Jessica Wyse, Cheyney Dobson,
and Jeffrey Morenoff. 2014. “Making Ends

Meet After Prison.” Journal of Policy Analysis
and Management 33 (2): 440–70.

Holzer, Harry J., Steven Raphael, and Michael
A. Stoll. 2003. “Employment Barriers Facing

Ex-Offenders.” Paper presented at the Urban
Institute Reentry Roundtable Employment
Dimensions of Reentry: Understanding the
Nexus between Prisoner Reentry and Work,New York.
Mauer, Marc, and Ryan King. 2007. A 25-Year
Quagmire: The War on Drugs and Its Impact
on American Society. Washington, DC: The
Sentencing Project.
Raphael, Steven, and David F. Weiman. 2007. “TheImpact of Local Labor-Market Conditions on
the Likelihood that Parolees Are Returned to
Custody.” In Barriers to Reentry? The Labor
Market for Released Prisoners in Post-Industrial America, edited by Shawn D. Bushway,
Michael A. Stoll, and David Weiman, 304–32.
New York: Russell Sage Foundation.
Rhodes, William, Gerald Gaes, Jeremy Luallen,

555

Ryan Kling, Tom Rich, and Michael Shively.

2016. “Following Incarceration, Most Released
Offenders Never Return to Prison.” Crime andDelinquency 62 (8): 1003–25.
Sabol, William J. 2007. “Local Labor-Market
Conditions and Post-Prison Employment: Evidence from Ohio.” In Barriers to Reentry?
The Labor Market for Released Prisoners in
Post-Industrial America, edited by Shawn D.
Bushway, Michael A. Stoll, and David F. Weiman, 257–303. New York: Russell Sage Foundation.
Schnepel, Kevin. 2016. “Good Jobs and Recidivism.” Economic Journal. doi: 10.1111/
ecoj.12415.
Travis, Jeremy. 2005. But They All Come Back:
Facing the Challenges of Prisoner Reentry.
Washington, DC: Urban Institute.
Wang, E. A., G. A. Zhu, L. Evans, A. Carroll-Scott,
R. Desai, and L. E. Fiellin. 2013. “A Pilot

Study Examining Food Insecurity and HIV
Risk Behaviors among Individuals Recently
Released from Prison.” AIDS Education andPrevention 25 (2): 112–23.
Yang, Crystal S. 2016. “Local Labor Markets andCriminal Recidivism.” Journal of Public Economics. doi: 10.1016/j.jpubeco.2016.12.003.