Welfare Magnets: The Race for the Top

Abstract:     
Race to the bottom explanations of welfare policies suggest that the power to set welfare payouts should be assigned to the federal government. Such theories predict that states cut benefits levels when faced with an increased demand for welfare from welfare migrants. This Article's econometric study of the determinants of AFDC payouts finds no evidence that states react in this way. This suggests that states should be accorded the power to curtail welfare payments to new arrivals through residency requirements, an issue left as moot in Anderson v. Green.

JEL Classification: I38, J61, H53, H72

working papers series