Welfare policies and migration of the poor in the United States: An empirical note

This paper has investigated the impact of geographic welfare benefit differentials upon migration in the United States. Unlike other related studies, which typically focus upon black migration (as a surrogate measure of migration of the poor), the present study focuses directly upon migration of the poor per se. A variety of reduced-form estimates are provided. The evidence strongly suggests that the net in-migration of the poor is positively and significantly influenced by higher nominal AFDC levels and by higher real AFDC levels. These findings support the welfare magnet hypothesis, which alleges that relatively high welfare levels act to attract poor migrants. Moreover, given that poor migrants are attracted non only by high nominal welfare levels but also by high real welfare levels, an argument can be made for establishing geographically uniform real welfare benefit levels in the United States. This uniformity presumably should act, over the long run, to eliminate the human resource distortions being caused by the currently prevailing welfare system.The authors are indebted to Michael Greenwood, Dick Muth, Jim Kau and Janet Pack. Naturally, the usual caveat applies.