An Empirical Investigation of the Role of AFDC Benefits in Location Choice

by Carole Roan Gresenz

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This paper examines whether historical differences across states in AFDC benefits affected the location decisions of AFDC recipients and those eligible for AFDC. Two estimation strategies are employed. The first strategy is to ascertain whether in equilibrium and holding all else constant individuals are distributed more heavily in high-benefit states. The second strategy is to analyze the effect of changes in benefits over time on individuals' decisions to change locations. The two empirical strategies yield consistent results. Benefit differentials across states do not appear to shift the equilibrium distribution of individuals toward higher-benefit states and changes in AFDC benefits over time do not significantly affect individuals' decisions to change locations.

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