The relationship between substance abuse and welfare participation is complex and research has provided few conclusive answers. Despite this, policy makers have frequently argued that the welfare system promotes substance abuse by providing recipients with cash for purchasing alcohol and drugs, thus enabling substance abuse. Where transfer payments are seen as promoting substance abuse, there have been serious implications for clients receiving aid: Policy makers have substituted vouchers for cash entitlements, have used representative payees to monitor recipients' spending, or have simply made people with substance abuse problems categorically ineligible for aid. In this paper, we examine the hypothesis that receiving cash entitlements increases the use of alcohol and drugs in a 6-year longitudinal study of welfare recipients. We also examine the competing hypothesis that drinking and drug use declines in the welfare population over time, due to declining disposable income for purchasing drugs and alcohol, as well as naturally-occurring reductions in use due to the aging of young adults, known as the phenomenon of "maturing out." Our analysis finds more support for the latter hypothesis than it does for the hypothesis that aid receipt enables substance abuse. Welfare recipients who began the study as heavy drinkers or drug users showed high rates of improvement over time, particularly evidenced in declining heavy drug use. Over time, entitlement income was associated with reductions in the use of alcohol and illicit drugs, in statistical models controlling for demographic characteristics, time on aid, treatment experiences and other confounding effects.
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