Low-balling benefits

Brad De Long delong at econ.Berkeley.EDU
Fri Sep 25 10:53:49 PDT 1998

>The bus ticket stuff is not new. The evidence
>on migration for the sake of benefits is not
>strong, in my view. It is true that this may
>not deter states from trying to low-ball each
>other, but they could have been doing this
>anyway. Under AFDC they could set benefit
>levels and 'compete' for the outmigration of
>public assistance beneficiaries.

Under AFDC, you lost federal matching funds if you cut benefits to try to induce the poor to move elsewhere. The fact that you lost federal matching funds was a brake on the low-balling.

Do people migrate for benefits? Probably not much. Do conservative state legislators believe that people migrate for benefits? 100%. How much low-balling did the federal match in AFDC prevent? I don't know, but we're going to find out over the next decade and I am scared...

Brad DeLong

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