Drugs and welfare

One of the more common objections to drug legalization is that, given the welfare state, folks would then have far too strong a risk of free riding off the state while being a drug user. It's not a crazy objection. Of course, if what we really worried about was that folks on welfare might take drugs, or that working folks might "drop out", we'd put in place policies like making receipt of welfare conditional on passing random drug tests.

And it even turns out that those latter policies work. Hope Corman is a visiting Erskine Fellow in our department and has passed along one of her recent working papers.

Exploiting changes in welfare policy across states and over time and comparing relevant population subgroups within an econometric difference-in-differences framework, we estimate the causal effects of welfare reform on adult women’s illicit drug use from 1992 to 2002, the period during which welfare reform unfolded in the U.S. The analyses are based on all available and appropriate national datasets, each offering unique strengths and measuring a different drug-related outcome. We investigate self-reported illicit drug use (from the National Surveys on Drug Use and Health), drug-related prison admissions (from the National Corrections Reporting Program), drug-related arrests (from the Uniform Crime Reports), drug-related treatment admissions (from the Treatment Episode Data Set), and drug-related emergency room episodes (from the Drug Abuse Warning Network). We find robust and compelling evidence that welfare reform led to declines in illicit drug use and increases in drug treatment among women at risk for relying on welfare, and some evidence that the effects operate, at least in part, through both TANF drug sanctions and work incentives.

Corman and her coauthors estimate that welfare reform reduced recipients' drug use by 14%. TANF also reduced drug related emergency room visits by about 10%. States with stronger welfare sanctions for drug use saw larger declines in drug use than states with weaker incentives.

Hope gives the usual caveats in the paper about how further work would be necessary before drawing policy conclusions, but I'm going to do it anyway. Would there be any legs on a policy that would combine marijuana legalization with welfare reform and increased funding for drug treatment centres for countries like New Zealand that haven't yet reformed their welfare systems? Drugs would then be legal for the folks not on a benefit, who would have reasonable incentives to avoid levels of consumption that would induce dropping from the labour market; folks on a benefit would be no worse off with respect to drug law than they are now. It sounds like the kind of compromise that could bring the bluer parts of National towards marijuana law reform.