Disability payments may spur drug abuse

Paying out certain types of government aid in a monthly lump sum appears to fuel a spate of harmful and often fatal drug binges, according to a new study in a forthcoming issue of the Journal of Public Economics that links the monthly arrival of disability checks with a sharp rise in drug related hospitalizations and deaths. The findings by researchers at the University of California, Santa Cruz and Texas A&M University suggests that spreading out aid payments over several weeks could be a way to relieve some of the stress on hospitals and health care workers who struggle to handle the monthly surge.

The analysis found that in California, the 23 percent increase in drug-related hospital admissions that occurs in the first five days of any given month is driven largely by the arrival of Supplemental Security Income (SSI) and Social Security Disability Income (DI) payments. In particular, hospital deaths among SSI recipients increase 22 percent at the beginning of the month.

This research was funded by the Substance Abuse Policy Research Program (SAPRP) of the Robert Wood Johnson Foundation. The paper entitled “The Effects of Government Transfers on Monthly Cycles in Drug Abuse, Hospitalization and Mortality” is in press in the peer reviewed Journal of Public Economics, though an online version is available now. The study notes that for both groups the increase in hospital admissions begins shortly after the checks arrive. “SSI aid arrives on the first of the month and hospital admissions begin rising on the second while DI aid arrives on the third of the month and the admissions surge begins on the fourth,” says lead author, Carlos Dobkin, PhD, with the University of California, Santa Cruz.

However, the investigators found that “contrary to what some analysts have suggested” monthly welfare payments, such as those administered through the federal Temporary Aid for Needy Families (TANF) program, do “very little” to exacerbate drug related hospitalizations and deaths. Most of the increase, they state, is driven by SSI and DI recipients.

“Our results suggest that ‘full wallets’ can exacerbate impulse control problems,” says author Steven L. Puller, PhD, with Texas A&M University.

The authors observe that their findings could prompt policy makers to “explore the possible benefits of an alternate means of disbursing cash aid” payments, such as doling them out in installments throughout the month. They also recommend identifying the “small subset of aid recipients” who account for most of the substance abuse hospitalizations and consider changing the bulk of their aid from cash payments to “in-kind” support such as food or housing assistance.