Welfare Checks, Drug Consumption, and Health
Evidence from Vancouver Injection Drug Users
Chris Riddell Rosemarie Riddell
A B S T R A C T
This paper investigates the link between welfare payments and drug use among injection drug users. We find an increase in the likelihood of an over-
dose in the days following check arrival, and in the probability of leaving the hospital against medical advice AMA on check day. Using the check
arrival date as an instrument, we estimate the Local Average Treatment Effect of leaving AMA on subsequent readmission and the probability of a
drug overdose. The results indicate that, for individuals influenced by check day, leaving AMA leads to readmission much sooner than planned dis-
charge, longer subsequent stays in the hospital, and a substantial increase in the probability of a drug overdose.
I. Introduction
The relationship between social assistance and substance abuse has been a topic of much debate in the United States where, in 1996, Public Law 104-
121 terminated Supplemental Security Income and Social Security Disability Income SSIDI for recipients with a primary diagnosis related to substance
abuse. The rationale for the law was a belief that such recipients were spending the money on drugs and alcohol such that welfare was effectively “aiding and abetting
addiction” Cohen 1994. Canada has made no such change in the social assistance legislation.
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Chris Riddell is an assistant professor in the School of Policy Studies at Queen’s University, and Rosemarie Riddell is a Clinical Nurse Specialist at St. Paul’s Hospital. The authors thank Mike
Campolieti, David Green, Morley Gunderson, Doug Hyatt, Craig Riddell, and Aloysius Siow for useful discussions, and especially Tom Crossley, Harry Krashinsky, and two anonymous referees for very helpful
comments. [Submitted May 2003; accepted June 2005]
ISSN 022-166X E-ISSN 1548-8004 © 2006 by the Board of Regents of the University of Wisconsin System
1. Income assistance laws are under provincial jurisdiction in Canada. Our reading of the provincial laws for the five largest provinces is that only Ontario in a legislative change made in 1997 has a strong restriction
T H E J O U R NA L O F H U M A N R E S O U R C E S
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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
