A few studies in the public health literature have shown evidence of so-called “check effects”; that is, a relationship between the day welfare checks are released
and subsequent increases in outcomes such as hospital admissions, drug-related fatal- ities and 911 calls for instance, Shaner et al. 1995; Philips, Christenfeld, and Ryan
1999.
In addition, economists have examined the relationship between identifiable, pre- announced income changes and consumption for instance, Wilcox 1989 and Parker
1999 in the case of social security-related payments. One such study directly tests for a consumption-related check effect among welfare recipients, and finds that the prob-
ability and amount of daily expenditures increases markedly on the day of check arrival Stephens 2003.
This paper contributes to the check-effect literature by conducting a unique test using hospital admissions data on injection drug users IDU from the Canadian city
of Vancouver. We first examine the distribution of drug overdose admissions over time as a way of identifying any link between welfare payments and drug consumption. We
then address the question of whether drug users are more likely to leave the hospital against medical advice AMA—thereby interrupting their treatment—on the day that
welfare checks are released. Finally, we test whether check day is an environmental cue that triggers drug use by using “Welfare Wednesday” as an instrument to estimate
the Local Average Treatment Effect of leaving AMA on subsequent readmission and the likelihood of a subsequent drug overdose.
II. Background
The situation in Vancouver’s Downtown Eastside is dire. In 1993 drug overdoses from heroin became the leading cause of death among men 30–49 years of
age Cain 1994. Through the 1990s, Vancouver has consistently had the highest over- all levels of overdose deaths in Canada with over 300 in 1998 alone and over 2000
between 1991 and 1998 Riley 1998. According to a statement by the British Columbia General Coroner, Vancouver’s overdose death rate is “very likely” the high-
est in North America The Washington Post 1997. The prevalence of HIV infection among Vancouver’s injection drug users is conservatively estimated to be 25 percent
McLean 2000 with some articles in the media quoting a rate as high as 50 percent for instance, The Canadian Press 2000. Even with the conservative estimates,
Vancouver is widely believed to have one of the highest levels of HIV infection among injection drug users in North America, and similar to cities such as New York
and Bangkok Riley 1998; Stevens 2000. The federal government is starting to take Riddell and Riddell
139
on collecting disability support if dependent on or addicted to alcohol or drugs see Subsections 2 and 3 of Section 5, part 1 of the Ontario Disability Support Program Act. However, the Ontario law is not as restric-
tive as the U.S. law because an individual with an addiction can remain eligible for benefits if they have a “substantial physical or mental impairment” see Subsection 3, which would generally include HIVAIDS
and various psychiatric conditions, both of which are common among the injection drug users in our data see Table 1.
notice: The Health Minister announced in July 2001 a 7 million commitment to the city of Vancouver for community health promotion efforts.
The IDU population has a very high incidence of welfare receipt and hospital use, as will be discussed further in Section IV. Under B.C. Benefits Legislation, rates for
income assistance for an employable single adult effective October 1, 2002 include 325 for shelter and 185 for support allowance.
2
Individuals who have a severe mentalphysical impairment requires extensive assistance to perform daily tasks,
additional transportation costs, special diets that is confirmed by a physician to con- tinue for two years are eligible for full disability benefits Level II. Rates for Level
II benefits effective October 2002 include 325 for shelter and 461.42 for support allowance, which is the third highest in the country after Ontario and Alberta. Many
IDUs are eligible for Level II Disability due to advanced HIVAIDS-related illnesses.
Welfare checks are distributed once a month in the province of British Columbia, usually on the last Wednesday. In the “Downtown Eastside” of Vancouver—home to
around 10,000 IDUs McClean 2000—the notion that “Welfare Wednesday” is associ- ated with a number of days of binging on heroin, cocaine and alcohol has reached myth-
ical proportions in both the media and medical communities. Indeed, the weekend following Welfare Wednesday also is known as “Mardi Gras Weekend” Stevens 2000.
III. Welfare Checks and Drug Consumption
