| Abstract: | Whether states keep welfare benefits low in order to preventin-migration of benefit-seeking individuals is one of the greatquestions in the study of federalism. Assessing this questionis challenging, however, because it is difficult to specifyexactly what constitutes evidence that states inhibit theirspending for this reason. This article develops a model whichprovides a micro-founded framework for thinking about the issue.The model suggests that competition on redistributive programsdoes not induce "racing" among states, but does constrain spendingto be less than what the states would spend if migration werenot a concern. The model also provides specific guidance forthe form of this downward pressure. |
