The impact of the welfare reforms of 1996 on migration, participation and residential choice

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 gives states wide latitude to institute eligibility rules for welfare payment, set welfare payment amounts and decide on the income threshold that trigger welfare payments under the Temporary Assistance for Needy Families (TANF) program. Do recipients shop around for the best deal by migrating to a state with higher benefits and liberal eligibility rules in the post-welfare reform era? Does the migration behavior of single mothers support the lifecycle hypothesis? Do states with higher welfare payments and easier eligibility rules have increased participation rates for their migrant population compared to native residents? Do higher income eligibility threshold states attract more welfare-induced migrants compared to lower income eligibility threshold states? Are there any differences in participation rates in high-income states vis-a-vis low-income threshold states? Do welfare recipients compare welfare payment amounts and eligibility rules when deciding to migrate to an alternate state from their current state of residence?;This dissertation empirically evaluates the effects of the heterogeneity of eligibility rules, payments and income thresholds on the migration and participation behavior of mothers. Payments and rules play a substantial role in molding individual migration and participation behavior but at the aggregate level the welfare prone groups do not tend to differ from their peers because the effect sizes are small. For a large change in TANF payments there is a small probability of change in migration and participation. This is reflective of the fact that when taking a decision to migrate across states, payment differences need to be substantial for recipients to overcome the costs associated with the change in location. The outcomes for high-income thresholds tends to agree with the mechanical explanation of participation, i.e., a higher threshold level makes more individuals eligible for welfare and hence the participation rate is large in such states. The participation rate is not higher because of welfare migrants from other states.