The effect of Medicaid expansion on crime reduction: Evidence from HIFA-waiver expansions

• Published in: Journal of public economics 2017-10, Vol.154, p.67-94
• Main Authors: Wen, Hefei, Hockenberry, Jason M., Cummings, Janet R.
• Format: Article
• Language: English
• Subjects: Crime; Medicaid expansion; Substance use disorder treatment
• ISSN: 0047-2727; 1879-2316
• DOI: 10.1016/j.jpubeco.2017.09.001

Substance use figures prominently in criminal behavior. As such expanding public insurance and improving access to substance use disorder (SUD) treatment can potentially reduce substance use and reduce crime. We examine the crime-reduction effect of Medicaid expansions through the Health Insurance Flexibility and Accountability (HIFA) waivers. We find that HIFA-waiver expansion led to a sizeable reduction in the rates of robbery, aggravated assault and larceny theft. We also show that much of the crime-reduction effect likely occurred through increasing SUD treatment rate and reducing substance use prevalence. The implied benefit-cost ratio estimate of increased treatment on reducing crime ranges from 1.8 to 3.2. •We study the crime-reduction effect of Medicaid expansions to adult population between 2001 and 2008.•We find that Medicaid expansions led to an economically meaningful reduction in the rates of robbery, aggravated assault and larceny theft.•Much of the crime-reduction effect of Medicaid expansions likely occurred through increasing substance use disorder treatment rate and reducing substance use prevalence.