economics of leadership and hierarchy this paper explores leadership within hierarchical organizations for each hierarchy i consider a dynamic signaling game in which each player observes only the actions of his direct superiors before choosing his action at the top of the hierarchy are the leaders who learn the state from nature the hierarchy controls the flow of information and the timing of the game and determines the equilibrium output and welfare i show that the welfare optimal hierarchy is the chain because it maximizes the incentive of players to lead by example for their subordinates the chain remains optimal even in the presence of verifiable or unverifiable costly information acquisition by the leaders

the local structure of the welfare state uneven effects of social spending on poverty within countries research has shown that there is a strong negative relationship between social spending and poverty levels among urban inequality researchers it is often assumed that compared with the usa the welfare state has mitigated social differences explaining lower levels of urban inequality in most european countries however research on the role of the welfare state is often conducted on the national level and is thus unable to draw conclusions on the effects of social spending and redistribution on a lower level failing to take the within country variation into account this study connects welfare state research to urban inequality research by investigating the effects of social spending on poverty in urban and non urban areas we have conducted a cross national multilevel logistic regression analysis using eurostat and european social survey data of 2008 our findings suggest that the effects of social spending are unequally distributed within countries

do the elderly vote with their feet this research explores whether the elderly vote with their feet by migrating to states with government policies that treat them favorably a theoretical model is presented that clarifies the effects of cost of living amenities and the public sector on migration decisions and that informs our empirical analysis using state level migration data from the 1990 census we estimate out migration and in migration equations that suggest that the public sector is an important determinant of elderly migration but in sometimes unexpected ways our results lend some support for the tiebout hypothesis but they also raise serious questions about the nature of the elderly s preferences for government policy

the probability of dependence on public assistance despite almost incessant discussion of welfare reform see levy 1978 and department of health and social security 1978 traditional systems of income support and their associated problems remain largely intact the most intractable difficulty has been the conflict between the desire to reduce costs by concentrating benefits on the poorest families and the desire to preserve work incentives by not withdrawing benefits too rapidly if a recipient family starts earning hanoch and honig 1978 show that the incentive effect of income support schemes is theoretically ambiguous levy 1979 investigates the labour supply issue empirically this paper looks at the whole issue of welfare dependency using data on american families receiving benefits under the largest scheme of public assistance aid to families with dependent children afdc we concentrate on an important group of poor families those without fathers and examine in particular the following issues a the effectiveness of afdc in selecting the very poorest families for the largest benefits b the extent to which the number of recipients is influenced by the generosity of benefits and the implicit tax on earnings c the extent to which recipients take advantage of the opportunity to supplement benefits with earnings d whether the implicit tax on earnings discourages families from working e whether the disproportionate share of blacks among recipients reflects a difference in attitudes about work and welfare between blacks and whites or whether it is explained by the adverse circumstances of blacks four different levels of dependence are considered none partial i e benefits less than earnings substantial i e benefits more than earnings and total the probability of each level of dependence is taken as a function of family characteristics including earning potential and of the characteristics of the afdc system section i describes a theory of family behaviour based on the assumption that observed differences in the behaviour of apparently identical families reflect an underlying distribution of unobserved differences section ii discusses the statistical method used to estimate the probabilities a straightforward generalization of logit analysis section iii presents and interprets the statistical results and section iv summarizes our answers to the five issues posed above two comments on the choice and use of the data should be made before proceeding the choice of data for 1967 was influenced not only by the availability of two surveys the survey of economic opportunity and a survey of afdc recipients but also by the fact that 1967 was the last year in which afdc was a relatively pure scheme subsequent legislation imposed constraints on the extent to which states could withdraw benefits as recipients incomes rose more recently the explosion in the size of the food stamp programme still very small in

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

decentralized income redistribution reconsidered decentralized income redistribution reconsidered i introduction which is the appropriate level of government to undertake income redistribution this issue is receiving renewed attention from economists examining how migration and labor supply responses affect the costs of transfer payments at the state or federal level in a recent paper brown and oates 1987 use a formal public choice model to show that the possibility of migration of transfer recipients between states leads to suboptimal transfer levels even when taxpayers care only about transfer recipients within their own states with benefit spillovers across states their argument for federal responsibility for redistribution is presumably even stronger gramlich 1985 also argues that migration is large enough to lead to suboptimal levels of transfers at the state level because states with low benefit levels will be able to export their poor increasing the cost of redistribution to high benefit states gramlich s conclusion is based on the empirical work in gramlich and laren which finds that the migration effect is very strong though only in the very long run 1984 510 the implicit argument is that migration raises the cost of redistribution at the state level compared to the federal level 1 however neither brown and oates nor gramlich consider labor supply responses that is hours and participation in their analyses on the other hand several recent papers have attempted to estimate the cost of redistribution at the national level incorporating labor supply responses to taxes and transfers but not interjurisdictional migration 2 some empirical evidence is available which is consistent with either migration or labor supply effects for example helms 1985 uses time series cross section data on state expenditure and tax policies and finds that while spending on public services schools highways etc increases personal income increased state transfer payments financed by state taxes significantly reduce total state personal income this reduction could be caused by either migration or labor supply responses to taxes and transfers indeed helms s estimates indicate a very large response to transfer spending one more dollar of transfers reduces state personal income in the long run by 14 83 helms concludes states which seek to devote substantial tax revenues to transfer payments will experience significantly reduced growth prospects which limits the scope for redistribution at the state and local levels 1985 581 a concise summary of the standard argument concerning federalism and redistribution might be as follows 1 interstate migration of taxpayers and transfer recipients raises the taxpayer cost of income redistribution at the state level above the cost at the federal level 2 state wide redistribution confers spillover benefits to residents of other states 3 therefore as compared with a national system decentralized responsibility for income redistribution yields a less redistribution because its cost is higher and b less than the socially optimal amount of redistribution because of externalities my 1988 paper shows that step 1 of the above argument is not necessarily true because the migration effect which previous authors have stressed can be offset by a tax exporting effect by which residents of one state shift some of the fiscal cost of redistribution to residents of other states both the income effect and the substitution effect of increased redistribution will reduce the labor supply and hence earnings of transfer recipients the labor supply and earnings of taxpayers may also fall if substitution effects are strong enough the tax exporting effect arises if taxes and transfers on net reduce total earnings in a state since the state s federal tax obligations depend on its earnings

welfare payments and other economic determinants of female migration this article investigates the effects of welfare payments wages and unemployment on women s probability of interstate migration in the united states it also investigates if the income attraction of locations varies with recency of labor market experience welfare gains increase the probability of interstate migration welfare effects are largest for single mothers with small children and stronger among women with no recent labor market experience the welfare effects albeit small are larger than the wage effects the wage effects are weaker among women with no recent work experience ethnic specific analyses suggest differences in migration behavior among anglos african americans and puerto ricans

welfare reform and the race to the bottom theory and evidence economists have argued that welfare migration leads to a race to the bottom in the choice of welfare benefits although a system of federal matching grants can remedy this problem the recent welfare reform law replaced the existing matching grant structure with block grants a policy change that appears undesirable to judge whether this critique of welfare reform is justified this paper evaluates the evidence in favor of a race to the bottom after explaining the theoretical effects of welfare migration the paper surveys the empirical evidence on the occurrence of such migration concluding that the evidence is mixed the discussion also considers recent empirical tests for strategic interaction which show that benefit levels in nearby states affect a given state s benefit choice the most plausible source of such interaction is a concern about welfare migration which leads policymakers to look at benefits in neighboring states when making their own choices judging that the evidence appears consistent with the existence of a race to the bottom the paper concludes that the demise of matching grants may be undesirable from a policy perspective

nominal wage flexibility wage indexation and monetary union membership in a monetary union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non membership this counteracts the stabilisation policy cost of giving up monetary independence but more wage flexibility is only an imperfect substitute for an individual monetary policy it is possible that an increase in wage flexibility is welfare decreasing because of the accompanying rise in price variability the interaction between wage setting and central bank behaviour may result in either multiple equilibria or a unique full indexation equilibrium

migration and income redistribution responsibilities this study examines whether afdc benefits determine or discourage state to state migration flows in the united states a pooled cross section time series model is developed to estimate afdc benefits in a state and recipients and whether benefits in one state affect benefits in other states a second model using data from the 1980 census and the panel study of income dynamics estimates migration of afdc recipients and the level of benefits in in migration and out migration states both models indicate that small but statistically significant amounts of migration occur which may be quite important but only in the long run movers although small in number are much more likely to move to a state with higher benefits states perceive this migration as important indicating that states should have less control and the federal government more control over income redistribution

the effect of welfare and wage levels on the location decisions of female headed households abstract this paper develops and estimates a model designed to calculate the impact of welfare benefit levels wages and tax rates on the location choices of female headed households the empirical model assumes that women simultaneously choose both where they will live and whether or not they will participate in the welfare system based on their expected income and expected hours of work for each location participation possibility these income and hours expectations depend in turn on the welfare benefits wage and tax rates facing each household in each location it is found that both regional welfare levels and wage rates have a significant effect on the location decisions of this population the probability of a typical female headed household with little outside income leaving an area with low welfare payments and low wages can be as much as 12 points higher over a 4 year period than the probability of leaving a high welfare high wage area

how will emu affect inflation and unemployment in europe this paper explores how european monetary union will change the wage setting behavior of national labor unions we derive the impact of national inflation aversion and labor militancy on the performance of national labor markets under different monetary arrangements a common central bank raises inflation and unemployment if it acts as conservatively as national central banks however unemployment falls in countries that previously tied their monetary policy to the bundesbank we also examine the composition of emu and the influence of national labor market legislation jel classification e24 f02 f33

coordination versus flexibility in wage formation a focus on the nominal wage impact of productivity in germany greece ireland portugal spain and the united states wage coordination between countries of the european monetary union emu aims at aligning nominal wage growth with labour productivity growth at the national level we analyse the developments in germany the emu s periphery countries greece ireland portugal and spain along with the united states over the period 1980 to 2010 apart from the contribution of productivity to nominal wages we take into account the contributions of prices unemployment replacement rates and taxes by means of an econometrically estimated nonlinear equation resulting from a wage bargaining model we further study the downward rigidities of nominal wages the findings show that in past times of low productivity price inflation and reductions in unemployment still put significant upward pressure on nominal wage growth the periphery countries are far from aligning nominal wage growth with productivity growth german productivity is a major wage determinant but surely not the only one within the context of a free bargaining

the impact of state economic differentials on household welfare and labor force behavior abstract this paper calculates state specific income expectations for low income households using a simultaneous model of household labor force and welfare participation decisions a variety of simulations indicate the interlocking effects of existing state differences in welfare wages and taxes on work welfare choices and income significant differences among similar households in different states occur equalization of welfare benefits eliminates some but not all of these differences but generates potentially serious policy problems for the states

without cause or effect reconsidering welfare migration as a policy problem theory stories of welfare migration are often statistical narratives of economic rationality that portray welfare migrants as engaging in economically rational but illegitimate behavior three waves of scholarly studies of welfare migration can be delineated as reinforcing these stories with second wave studies in particular providing evidence of welfare migration yet it is questionable that 1 state welfare benefits vary enough to induce welfare migration 2 high levels of migration actually occur and 3 the migration patterns of poor families ought to be narrated as economically rational behavior directed toward the maximization of welfare benefits hypotheses variation in the real value of welfare benefits is small welfare migration is an infrequent occurrence making for a small proportion of the total welfare budget better explanations narrate the migration patterns of poor families in terms other than those narrowly focused on welfare benefits methods data on welfare benefits and per capita income is used to assess the real value of welfare benefits data from the public use microdata set 5 sample of the united states census is used to track the migration routes of poor single mothers with children results combined maximum benefits from aid to families with dependent children and food stamps are found to vary across the states only slightly more than per capita income approximately 90 of poor single mothers with children are not likely to move out of state over a five year period poor single mothers with children are not more likely to move to states with higher benefits narratives that account for alternative reasons including increased safety improved housing better economic opportunities and family ties should be explored as explanations of the migration patterns of poor single mothers with children

a model of welfare competition with evidence from afdc in this paper we test empirically for strategic behavior among the states using the cash support program aid to families with dependent children afdc to motivate the empirical work we adapt wildasin s model of income redistribution 1991 american economic review 81 757 773 to a model of interjurisdictional welfare competition although welfare competition may be generated from different frameworks we choose wildasin s model to illustrate how welfare benefit interdependence is genereated in the context of welfare migration we estimate a representative reaction function for afdc using both cross sections and pooled cross section data after controlling for other determinants of afdc benefit levels and for spatial error autocorrelation we find evidence showing competition 2000 academic press

new estimates of climate demand evidence from location choice abstract we develop and apply to census data a new method for estimating climate demand the method is useful for ranking quality of life based upon a willingness to pay criterion our two major findings are that the willingness to pay quality of life index is correlated with the hedonic approach s ranking but that the migration approach generates much larger estimates of willingness to pay for a more moderate climate this finding is relevant for evaluating the economic impact of global warming

the effect of the social welfare system on metropolitan migration in the us by income group gender and family structure this research paper addresses some important issues regarding out migration from and in migration to metropolitan areas in the u s particularly the effect of the social welfare system on migration decisions the primary focus is on migration by income group poor versus non poor with a secondary focus on how gender and family status relate to migration the results provide only very weak support for the hypothesis that social welfare benefits influence out migration decisions only of non poor female headed households but moderate support for the effect of such benefits on in migration decisions especially of low income and female headed households excerpt

labour market outliers lessons from portugal and spain iberian labour markets why spain and portugal are oecd outliers spain has the highest unemployment rate 22 2 of any european union country portugal one of the lowest 7 3 superficially these countries share many labour market features the toughest job security rules in the oecd an apparently similar architecture of wage bargaining and comparable generosity of their unemployment insurance systems at least since 1989 we address the puzzle by examining portuguese and spanish labour market institutions in particular job security unemployment benefits and the system of wage bargaining we then conduct empirical analysis of spanish and portuguese unemployment outflows and wage distributions using micro data we find differences in unemployment benefits non existent in portugal until 1985 and less generous nowadays differences in wage flexibility wage floors by category established by collective agreements are set at a lower relative level in portugal and in practice higher firing costs in spain a key explanation of the difference in portuguese and spanish unemployment rates is the wage adjustment process generous benefit levels may have been necessary for the path spanish unions took but this was not the sole explanation of different wage setting in spain and portugal olympia bover pilar garcia perea and pedro portugal

using geographic information systems to study interstate competition scholars have proposed two distinct explanations for why policies diffuse across american states 1 policymakers learn by observing the experiences of nearby states and 2 states seek a competitive economic advantage over other states the most common empirical approach for studying interstate influence is modeling an indicator of a state s policy choice as a function of its neighbors policies with each neighbor weighted equally this can appropriately specify one form of learning model but it does not adequately test for interstate competition when a policy diffuses due to competition states responses to other states vary depending on the size and location of specific populations we illustrate with two substantive applications how geographic information systems gis can be used to test for interstate competition we find that lottery adoptions diffuse due to competition rather than to learning but find no evidence of competition in state choices about welfare benefits our empirical approach can also be applied to competition among nations and local jurisdictions

a theory of yes men this paper illustrates an incentive for workers to conform to the opinion of their supervisors when firms use subjective performance evaluation this desire to conform arises endogenously from the firm s need to induce the worker to exert effort the author shows that firms may optimally eschew the use of incentive contracts to retain workers incentives for honesty the author illustrates that the incentive to conform implies inefficiencies even when workers are risk neutral and is likely to lead to more centralized decision making than in the absence of the desire to conform copyright 1993 by american economic association

afdc benefits and the inter urban variation in poverty among female headed households the percentage of families headed by females in poverty varies widely across metropolitan areas for example 8 37 of all families in albany georgia were female headed and in poverty in 1980 while in sheboygan wisconsin the figure was 1 1 though not as dramatic as this interregional difference intra regional variation can also be significant in detroit michigan 4 90 of families were femaled headed and in poverty and in the closest interstate metropolitan area toledo ohio the figure was 3 77 recent research into the behavior of low income femaleheaded families suggests that state benefit differentials in aid to families with dependent children afdc may in part be responsible in this paper we construct a model that explains an important and overlooked implication of non uniform benefit standards among states the inter urban variation in the size of the potential and actual afdc recipient population particular attention is given to 1 the impact of interurban differences in real afdc payments 2 the potential of afdc to alter the number of female headed families in poverty and 3 the relative importance of other urban characteristics in explaining the size of the potential and actual afdc recipient population the model uses 1980 census data and is estimated for all standard metropolitan statistical areas for which we were able to obtain data

toward an economic theory of leadership leading by example this paper explores leadership within organizations leadership is distinct from authority because following a leader is a voluntary rather than coerced activity of the followers this paper considers how a leader induces rational agents to follow her in situations when the leader has incentives to mislead them copyright 1998 by american economic association

insider forces and wage determination this paper investigates the relative importance of firm specific factors i e insider forces in wage determination using firm level data on 219 u k companies over 1974 82 it finds that a 1 percent rise in a firm s prices or productivity relative to the aggregate economy leads to a rise in relative wages of 0 1 0 2 percent as a corollary to this outside factors like the aggregate wage and the unemployment rate also play an important role there is evidence for insider based hysteresis effects but these are inversely related to the extent to which firms take national agreements into account copyright 1990 by royal economic society

strategic transmission of costly information it is ofren the case that an individual s decision is at least partly based on information received from another and when the agents payoffs depend on both the former s decision and on the latter s information there is an incentive for the informed individual to attempt to bias the decision maker s decision in his or her favor by strategically manipulating the information transmitted in a seminal paper crawford and sobel 1982 hereafter c s study such strategic information transmission in the context of an abstract sender receiver game variants of the crawford and sobel model have been applied widely and as the application varies so often does the interpretation of type in some cases type refers to a preference parameter given by nature as for example in bargaining theory e g farrell and gibbons 1989 matthews 1989 whereas in other settings for instance legislative decision making or expert testimony type refers to more or less technical information concerning how decisions map into final consequences and as such is acquired information e g gilligan and krehbiel 1987 milgrom and roberts 1986 when the information has to be acquired it is natural to suppose the acquisition is costly for otherwise there is no reason why such information is asymmetrically distributed so long as the receiver can observe surely or at least accurately infer whether the sender is informed and so long as messages are cheap talk there is no issue here for strategic information transmission save whether to become informed at all however there are many circumstances when it is inappropri ate to assume the receiver has such knowledge one possibility is that a receiver may know that a sender has some relevant informa tion but be uncertain of the quality of this information a second perhaps more important possibility is that a receiver is unable to tell whether a potential sender is uninformed inter alia this problem constitutes the rationale for ignorance of the law being inadmissible as a legal defense were it admissible then informed miscreants would mimic uninformed transgressors leads voters to be skeptical of politicians claiming ignorance of illegal arms deals and makes the sec sensitive to problems in distinguishing insider trading from legitimate good judgement so there is an intrinsic asymmetry in that it is generally possible for say senders to verify possession of at least some information but it is typically prohibitively difficult to verify any lack of knowledge

welfare and the multifaceted decision to move are poor single mothers more likely to stay in or move to states with higher welfare benefits this question has important implications on at least two levels as a policy matter the answer will enlighten us about the effects of welfare on society and will assist efforts to understand whether states systematically lower benefits in order to avoid becoming welfare magnets peterson and rom 1989 rom peterson and scheve 1998 volden 2002 this answer will also help us anticipate how welfare policies may evolve in other areas of the world where it is or is becoming as easy to move across jurisdictional boundaries as in the united states as a theoretical matter understanding the relationship between welfare and migration can help us better understand how the increasing mobility of people firms and capital affects governmental capacities to provide welfare and other redistributive benefits if generous government benefits prompt people who receive them to flow in and the people who pay for them to flow out the benefits will become increasingly difficult to sustain this is true not only for a federal system such as the united states but also for the international system in which political social and economic barriers to migration have fallen dramatically in recent years finding that welfare induced migration occurs in the united states would enhance concern about governmental capacity for social services finding no such behavior on the other hand would make us less inclined to believe that migration constrains governments in other less likely contexts lately most scholars researching the question have found very little or no support for the idea that welfare affects migration in the united states allard and danziger 2000 levine and zimmerman 1999 schram nitz and krueger 1998 schram and soss 1999 they conclude that the evidence is at best mildly in favor of the idea that welfare affects migration brueckner

endogenous leadership in incentive contracts abstract we study the effect of leadership on incentive contracts in a moral hazard framework in our model agents are allowed to choose the timing of their actions the agents may choose their effort levels simultaneously or sequentially we show that relative performance evaluation leads to a subgame in which agents make simultaneous effort choices whereas joint performance evaluation yields a subgame in which agents make sequential effort choices since agents exert more effort in the sequential game the principal uses joint performance evaluation to induce the leader follower relationship among agents

incentives to motivate abstract we present a model in which a motivator can take costly actions or what we call motivational effort in order to reduce the effort costs of a worker and analyze the optimal combination of motivational effort and monetary incentives we distinguish two cases first the firm owner chooses the intensity of motivation and bears the motivational costs second another agent of the firm chooses the motivational actions and incurs the associated costs in the latter case the firm must not only incentivize the worker to work hard but also the motivator to motivate the worker we characterize and discuss the conditions under which monetary incentives and motivational effort are substitutes or complements and show that motivational effort may exceed the efficient level

leadership based on asymmetric information rational players unconstrained by contracts or formal authority choose to follow a better informed leader whose action reveals part of her information if the leader satisfies a credibility condition then the unique nondegenerate equilibrium solves distinct shirking and coordination problems and achieves the first best if credibility fails as is more likely for a large organization then followers ignore the leader and equilibria are very inefficient appointing multiple leaders or a high cost leader can restore credibility if players invest privately in information then a leader often appears endogenously the equilibrium concept is an original extension of sequential equilibrium to continuous states

on the timing and efficiency of creative destruction we analyze the timing pace and efficiency of ongoing job reallocation that results from product and process innovation there are strong reasons why an efficient economy ought to concentrate both job creation and destruction during recessions when the opportunity cost of reallocation is lowest incomplete contracting between labor and capital can disrupt this synchronized pattern and decouple creation and destruction transactional difficulties also lead to technological sclerosis characterized by excessively slow renovation government incentives to production may alleviate high unemployment but exacerbate sclerosis in contrast creation incentives increase the pace of reallocation an optimal combination of both policies restores economic efficiency

migration the life cycle and state benefits how low is the bottom i show that among women likely to use welfare movers move to higher benefit states i also find that the probability likely welfare users will move at all is lower in higher benefit states this effect is concentrated early in the life cycle as theory predicts i construct a theoretical framework to measure the impact of welfare migration on optimal state benefits simulation results suggest little impact in higher benefit states but possibly a more substantial impact in other states finally evidence suggests little reason for concern due to welfare migration in using cross state variation in welfare generosity to identify incentive effects of the welfare system on other outcome variables

wage rigidity and unemployment in oecd countries real wage rigidity is often blamed for causing unemployment in the wake of adverse real shocks like changes in productivity or the terms of trade likewise nominal wage rigidity is blamed for causing unemployment in the wake of adverse nominal shocks like falls in nominal demand 1 however there has been relatively little systematic discussion of how these concepts should be defined some authors e g sachs 1979 have defined real wage rigidity as the opposite of nominal wage rigidity with the us nominally rigid and europe really rigid 2 the rigidity of european real wages has then been used to explain why europe has experienced a greater increase in unemployment since 1973 than the us but in this discussion real wage rigidity has not been measured in a way which would in fact predict how much unemployment would result from a given real shock the discussion has focused on the degree of nominal inertia in the system but the unemployment cost of real shocks does not depend primarily on the degree of nominal inertia but rather on the effect of unemployment in the phillips curve

leadership and information an organization makes collective decisions through neither markets nor contracts instead rational agents voluntarily choose to follow a leader in many cases incentive problems are solved the unique nondegenerate equilibrium achieves the first best even though every agent has incentives to free ride the leader has no special talents but is distinguished by getting exclusive access to information a crucial feature is that the leader reveals part but not all of her information it is this maintenance of informational asymmetry that permits achieving the first best jel d23 m54

games the states don t play welfare benefits and the theory of fiscal federalism fiscal federalism theory predicts that states will behave strategically in welfare programs because voter demand for welfare is sensitive to tax price while the tax price itself changes because of welfare induced migration this paper tests these propositions on afdc in the united states for a panel from 1982 88 using new models for the determination of the recipiency ratio the tax price and composite neighbors the data do not support any substantial tax price elasticity of demand for welfare estimates of migration effects on tax price are found to be sensitive to specification copyright 1995 by mit press

the effect of immigration on public finances the impact of immigration on the public finances is an important influence on public opinion this study aims to provide a thorough conceptual survey pointing out the complexities of a full understanding and the relevance of indirect effects and covering both static perspectives and longer run dynamic issues it considers simple accounting approaches which are relatively neglectful of behavioural responses but also tries to bring out the complexities in the nature of the relationship between immigration and the public exchequer that come with more sophisticated modelling of its economic effects

leading for the long term abstract how do leaders build credibility and what happens if they can t or don t existing economic models of leadership consider static settings only and thus are not well suited for addressing such issues moreover an important phenomenon of leadership is its persistence to allow for credibility and other behaviors that make sense only in repeated games such as the followers paying the leader tribute this paper considers a repeated game version of hermalin b e 1998 toward an economic theory of leadership leading by example american economic review 88 1188 1206 leadership model

an empirical investigation of interstate afdc benefit competition claims that states which offer generous welfare benefits attract the poor and that some states pay low benefits intending to drive the poor away are neither uncommon nor entirely un founded this paper employs a two player state generalized game to model states choice of a benefit level in the aid to families with dependent children afdc program migration by the poor in response to interstate differentials in earnings and welfare opportunities and the subse quent changes in afdc caseloads drive this game estimation of the model using 1979 data suggests that states within approximately 750 miles of each other do engage in a benefit setting game the rival s initial number of poor and preference for non afdc consumption appear to be the more influential rival characteristics these findings while derived from a different methodological approach are consistent with previous studies which indicate that welfare recipients tend to move toward higher benefit states such migration may impede the efficient spatial allocation of labor the results also indicate that states will tend to offer lower benefits given recipient migration than would be the case otherwise state jurisdiction over benefits consequently leads to underprovision of afdc federalization of the afdc program would improve efficiency in terms of the spatial allocation of labor and the provision of afdc

welfare induced migration at state borders new evidence from micro data abstract this paper extends and synthesizes the various approaches used in the recent welfare migration literature to both offer the most comprehensive set of tests to date for welfare migration and to also determine the relative importance of short distance moves in welfare migration flows the current study follows on the finding of mckinnish mckinnish t importing the poor welfare magnetism and cross border welfare migration journal of human resources 2005 40 57 76 of welfare migration effects obtained by comparing welfare participation at state borders to state interiors this identification strategy is extended to micro data from the 1980 and 1990 decennial censuses and combined with the demographic comparisons used elsewhere in the welfare migration literature the signs and patterns of the estimates are consistent with the presence of welfare migration effects and the magnitudes of the estimates are consistent with the importance of short distance moves in welfare induced migration flows but most of the estimates are not statistically significant

immigration and welfare magnets this article investigates if the location choices made by immigrants when they arrive in the united states are influenced by the interstate dispersion in welfare benefits income maximizing behavior implies that foreign born welfare recipients unlike their native born counterparts may be clustered in the states that offer the highest benefits the empirical analysis indicates that immigrant welfare recipients are indeed more heavily clustered in high benefit states than the immigrants who do not receive welfare or than natives as a result the welfare participation rate of immigrants is much more sensitive to changes in welfare benefits than that of natives

locational choice of afdc recipients within california a conditional logit analysis abstract this paper examines factors that influence migration of afdc recipients within california a county level conditional logit model is used to analyze the impact of cost adjusted benefits on intrastate moves during recipients first year of welfare participation costs of living particularly housing costs differ considerably across counties of california yet the welfare benefit is set at the state level this creates the potential for variation in the purchasing power of the welfare benefit if a family chooses to move variation in cost of living is shown to have a significant effect on migration patterns of afdc recipients estimates suggest that a 150 decrease in fair market rent results in 15 more migration to the county recipients migration is more responsive to cost of living than migration of the general population