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Title: ESSAYS ON WELFARE POLICY INDUCED MIGRATION OF MOTHERS
Citation Type: Dissertation/Thesis
Publication Year: 2011
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Abstract: In the 1990s the US Congress adopted key changes to the US welfare system. As part of the reform all states instituted additional restrictions on eligibility for welfare payments including family caps and work requirements, as well as time limits on benefit payment. In Chapter One I investigate whether the new cross state variations in eligibility requirements and benefit levels affect migration decisions of welfare-prone mothers. Unlike previous studies of welfare-migration, this paper allows for multiple location choices. Using US Census 2000 data in a conditional logit framework, this paper finds only a trivial effect of welfare payment variation on the migration patterns of welfareprone mothers in this stricter regime. Quantitatively, for example, using the data on never married high school dropout mothers (treatment group) and never married high school graduate mothers results indicate that a $100 increase in the monthly welfare benefit in California will increase the number of treatment group mothers in California by 164 from the base of 50,756. To control for the costs of migration I include distance for each potential move, as well as the mother’s birth location. Both of these factors have statistically significant effects on the propensity to migrate. Chapter Two depicts the effects of other welfare policy variables and labor market factors like wage rate on the probability of choosing a location. The results indicate that time limits and family caps have trivial impacts on the propensity to migrate. However, the gain in utility due to higher welfare benefit depends on the length of the time limit and the family cap. Imposition of a family cap lowers the gain in utility due to a higher time limit. Given that the new welfare policy placed greater emphasis on labor market participation, I also look at the impact of labor market factors on the location choice. I find that in response to a one dollar increase in California’s hourly wage the probability of choosing California for never married high school dropout mothers goes up by 0.007 to 0.023 percentage points. However, such an increase in the wage induces the probability of choosing California for different comparison group mothers to go up by 0.009 to 0.036 percentage points. The trend of higher wage effects with higher levels of education is also observed for the probability of choosing New York. The positive wage effects provide policy makers with another alternative to encourage labor market participation apart from the work requirement policies under the welfare program. Chapter Three provides a study of welfare benefit induced location choices observed in the 1980 Census data. McKinnish (2007) uses a simple logit model that does not consider multiple location choices and assumes equal impact of the welfare benefit on migrating out of each state. I overcome these deficiencies by studying the effect of welfare benefit using a conditional logit model that considers multiple location choices and allows the effect of welfare benefit to vary by states. Estimated coefficients show that the gains in indirect utility due to higher welfare benefit payments are bigger when a mother’s children are young. The difference-in-difference effects indicate that on average a $100 increase in the monthly welfare benefit in the old state of residence will increase the probability of choosing that state for never married high school dropout mothers by 0.01 to1.12 percentage points. Thus, using a more realistic and superior empirical methodology, I find relatively smaller magnitude of welfare magnet effect in 1980 compared to that found in McKinnish (2007).
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Authors: Ghosh, Projesh Prasad
Institution: Clemson University
Department: Applied Economics
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Pages: 121
Data Collections: IPUMS USA
Topics: Family and Marriage, Gender, Migration and Immigration, Poverty and Welfare
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