Does Welfare Policy Affect Residential Choices? Evidence from a Natural Experiment
AbstractThis paper studies how changes in welfare benefit levels affect welfare recipients’ residential choices. Although several empirical studies have stressed that welfare policy may affect residential choices of welfare recipients, few studies have simultaneously taken into account that residential choices of welfare recipients also affect welfare policy. The main contribution of this paper is to address this policy endogeneity by utilizing a policy reform as a natural experiment. The results show that welfare policy exerts a nontrivial effect on residential choices of welfare recipients. Moreover, I show that ignoring the policy endogeneity may give rise to a downward bias in the estimated migration responses.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 503.
Date of creation: May 2007
Date of revision:
Welfare Benefits; Migration; Policy Endogeneity;
Find related papers by JEL classification:
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-19 (All new papers)
- NEP-GEO-2007-05-19 (Economic Geography)
- NEP-MIG-2007-05-19 (Economics of Human Migration)
- NEP-PBE-2007-05-19 (Public Economics)
- NEP-URE-2007-05-19 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wildasin, David E, 1991. "Income Redistribution in a Common Labor Market," American Economic Review, American Economic Association, vol. 81(4), pages 757-74, September.
- P. B. Levine & D. J. Zimmerman, .
"An empirical analysis of the welfare magnet debate using the NLSY,"
Institute for Research on Poverty Discussion Papers
1098-96, University of Wisconsin Institute for Research on Poverty.
- Phillip B. Levine & David J. Zimmerman, 1999. "An empirical analysis of the welfare magnet debate using the NLSY," Journal of Population Economics, Springer, vol. 12(3), pages 391-409.
- Phillip B. Levine & David J. Zimmerman, 1995. "An Empirical Analysis of the Welfare Magnet Debate Using the NLSY," NBER Working Papers 5264, National Bureau of Economic Research, Inc.
- Terra McKinnish, 2005. "Importing the Poor: Welfare Magnetism and Cross-Border Welfare Migration," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
- Dahlberg, Matz & Edmark, Karin, 2004.
"Is there a "Race-to-the-Bottom" in the Setting of Welfare Benefit Levels? Evidence from a Policy Intervention,"
Working Paper Series
2004:19, Uppsala University, Department of Economics.
- Dahlberg, Matz & Edmark, Karin, 2008. "Is there a "race-to-the-bottom" in the setting of welfare benefit levels? Evidence from a policy intervention," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1193-1209, June.
- Karin Edmark & Matz Dahlberg, 2004. "Is There a "Race-to-the-Bottom" in the Setting of Welfare Benefit Levels? Evidence from a Policy Intervention," Econometric Society 2004 North American Summer Meetings 473, Econometric Society.
- Fiva, Jon H. & Rattso, Jorn, 2006. "Welfare competition in Norway: Norms and expenditures," European Journal of Political Economy, Elsevier, vol. 22(1), pages 202-222, March.
- Timothy Besley & Anne Case, 1994.
"Unnatural Experiments? Estimating the Incidence of Endogenous Policies,"
NBER Working Papers
4956, National Bureau of Economic Research, Inc.
- Besley, Timothy & Case, Anne, 2000. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," Economic Journal, Royal Economic Society, vol. 110(467), pages F672-94, November.
- McKinnish, Terra, 2007. "Welfare-induced migration at state borders: New evidence from micro-data," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 437-450, April.
- Federico Revelli, 2004.
"Performance Rating and Yardstick Competition in Social Service Provision,"
CESifo Working Paper Series
1270, CESifo Group Munich.
- Revelli, Federico, 2006. "Performance rating and yardstick competition in social service provision," Journal of Public Economics, Elsevier, vol. 90(3), pages 459-475, February.
- Meyer, Bruce D, 1995.
"Natural and Quasi-experiments in Economics,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 13(2), pages 151-61, April.
- Jan K. Brueckner, 1999. "Welfare Reform and the Race to the Bottom: Theory and Evidence," Southern Economic Journal, Southern Economic Association, vol. 66(2), pages 505-525, January.
- Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
- Alejandro Gaviria & Carlos Medina & Jorge Tamayo, 2010.
"Assessing the Link between Adolescent Fertility and Urban Crime,"
BORRADORES DE ECONOMIA
006860, BANCO DE LA REPÚBLICA.
- Alejandro Gaviria & Carlos Medina & Jorge Andres Tamayo, . "Assessing the Link between Adolescent Fertility and Urban Crime," Borradores de Economia 594, Banco de la Republica de Colombia.
- Edmark, Karin, 2007. "Effects of work requirements on welfare migration," Working Paper Series 2007:29, IFAU - Institute for Evaluation of Labour Market and Education Policy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (J Bruusgaard).
If references are entirely missing, you can add them using this form.