The Welfare Magnate Debate Revisited in the Context of Welfare Reform

This paper re-examines the welfare magnet hypothesis in the context of welfare reform by redefining both migration and generosity. Due to the intrastate variation in program parameters, migration is defined at the county, rather than state level, and the typical definition of generosity is expanded to control for differences in time limits. Using data from the National Longitudinal Survey of Youth 1979 cohort (NLSY79), results indicate that time limits do play a significant role in cross-county migration decisions, although the effect is small and greatly diminished when the individual must travel at least 100 miles to avoid the time limit. Estimates also provide some evidence that benefit differentials also positively influence decisions.