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Do Households Move to Obtain Higher Benefits? A "Natural Experiment" Approach

Gary Painter
One of the chief concerns that US policy-makers have discussed in the recent welfare reform legislation is that individual states will engage in a "race to the bottom". In order to avoid offering relatively generous welfare packages that would attract recipients, states would cut benefits. While the notion that households move to achieve greater benefits is pervasive in the popular press, research suggests that the number of households who move to obtain higher benefits is small. Two separate events which occurred in Los Angeles, CA, and Toronto, ON provide insight into the question of whether households will "chase benefits". In both cases, households were given the opportunity to receive greater housing benefits if they moved to a different geographic location. The results of this study suggest that few households move to obtain greater benefits even in situations where the potential gain to moving is quite large.