The Role of Information in Explaining the Lack of Welfare-Induced Migration

Jeremy McCauley

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: This paper examines the role of information as a driver of domestic welfare-induced migration decisions. I exploit a policy reform in England where the government began publicly releasing quality star ratings for each area’s social services (social care). I study the effects of this “information shock†on the main service users, the elderly, and find a one star increase in publicly-released rating is associated with a 1.3% increase in the elderly population of that area. Based on empirical evidence, I estimate a search model with learning, where the elderly search for areas with better social services and gradually learn their true quality. Mimicking the information shock, the model reveals that individuals are more influenced by the rating of their own area than by ratings for other areas. Those induced to move by the information shock experience welfare increases valued at £600 per year.

Date: 2020-10-22
New Economics Papers: this item is included in nep-age, nep-dge and nep-mig
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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:20/729

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