The Impact of Staggered Benefit Disbursement on Opioid Use, Hospitalizations, and Mortality
AbstractA commonly recommended policy to alleviate substance misuse is to distribute government welfare benefits to recipients multiple times a month, rather than in a single lump sum payment. Among illicit substances, opioids are particularly deadly. The opioid epidemic has disproportionately affected low-income individuals that receive government welfare benefits. West Virginia (WV) has the highest opioid-related death rate in the country. One of the poorest US states, WV relies heavily on government cash transfer programs, specifically Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). Our project provides the first causal evidence on the relationship between income transfers and opioid misuse.
Government income transfers, including SNAP and TANF, are disbursed to each household once monthly. It is common to receive both SNAP and TANF benefits on the same day. However, WV distributes TANF to everyone on the 1st of the month, but distributes SNAP during one of the first nine days of the month according to the first letter of the last name. This distribution schedule offers a randomized natural experiment for studying the causal impact that timing and number of benefit disbursement days has on opioid misuse.
Leveraging the random assignment of SNAP distribution day and the first of the month TANF receipt, we estimate the impact of multiple benefit distribution days across the month compared to a single distribution day. We find that those with multiple distribution days are 26% less likely to have an opioid use disorder-related event during the month. Further, we find that these effects are heterogeneous according to the size of the transfer, relative to total household income; among households that receive multiple payments, those for whom SNAP payments represent a greater share of their total income are 33% less likely to have an opioid-related event.