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.
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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)
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