The Impact of Increasing Community-Directed State Mental Health Agency Expenditures on Violent Crime

Violent crime remains a prevalent threat to population health within the United States. States offer varying policy approaches to prevent violent crime and support behavioral health, such as community-based programs that include substance use disorder prevention and treatment. Using state mental health agency data, we construct a panel of U.S. states over nine years and apply an instrumental variables empirical model with state and time fixed effects to adjust for policy endogeneity, omitted variable bias, and time trends. We find that a 10% increase in community-directed state mental health agency expenditures yielded nearly a 4% reduction in violent crime rates. Larger magnitude reductions in violent crime rates were associated with the presence of gun control regulations and increases in the proportion of the population completing secondary education. Policymakers should consider the added benefit of violent crime reduction when considering budgetary allocations of community-directed state mental health agency expenditures.