Should we expect a race to the bottom in welfare benefits? Evidence from a multistate panel, 1979-1995

Mark W Smith

MPRA Paper from University Library of Munich, Germany

Abstract: Evidence exists that welfare recipients migrate between states to seek more generous benefits, potentially leading states to lower AFDC benefits to avoid such welfare migration. Taken further, this raises the specter of states competitively lowering benefits in reaction to similar moves by other states. The naïve model of policymaking assumes that benefits are solely a function of state characteristics. If benefits depend on the threat of welfare migration or other interstate competition, however, one must account for possible spillovers. This paper presents tests for the presence of welfare-policy spillovers in a panel of 47 states over the period 1979-1995. I find weak evidence of spillovers even in the presence of state fixed effects and political and budgetary-control variables.

Keywords: income support; United States; welfare benefits; Temporary Assistance to Needy Families; Aid to Families with Dependent Children; spatial spillovers (search for similar items in EconPapers)
JEL-codes: E62 H73 H75 I38 (search for similar items in EconPapers)
Date: 1999-05
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/10125/1/MPRA_paper_10125.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:10125

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().