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

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  • Jeremy McCauley

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.

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  • Jeremy McCauley, 2020. "The Role of Information in Explaining the Lack of Welfare-Induced Migration," Bristol Economics Discussion Papers 20/729, School of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:20/729
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    Cited by:

    1. Riley Wilson, 2021. "Isolated States of America: The Impact of State Borders on Mobility and Regional Labor Market Adjustments," Upjohn Working Papers 21-358, W.E. Upjohn Institute for Employment Research.

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