Welfare reform, child care considerations, and migration decisions

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), passed in 1996, instituted a new welfare program, Temporary Assistance to Needy Families (TANF), with an emphasis on working for one's benefits and a five-year lifetime limit on benefits whereby benefits are withdrawn no matter one's financial or employment circumstances---thereby putting an end to the "enabling" aspect of Aid to Families with Dependent Children (AFDC). Given the changes to the welfare system, the research conducted here is done in an attempt to determine the migration effects (both the welfare magnet effect and the effect of social capital on migration) of the new work incentives arising out of PRWORA. Regarding the welfare magnet effect, the empirical results suggest that more aggressive state TANF programs effectively deter migration. In one way, this implies that states need only toughen their stance on welfare benefits and work requirements to stop the flow of potential welfare recipients into their states. On the other hand, the results also suggest that welfare recipients already living within the more aggressive states are not moving to find employment and, therefore, may not be behaving in ways that would make available sufficient employment opportunities. Regarding the effect of social capital on migration patterns, the empirical results suggest that some welfare-receiving mothers are not responding to TANF incentives by moving. More specifically, if welfare-susceptible mothers reported using their access to social capital (i.e., relatives) to provide care for their children, they were less likely to have moved recently. It may then be proposed that many single mothers are not poor because they choose to be but because their choice sets (at least in their eyes) are such that self-sufficiency is unattainable and financial and emotional help is a necessity, whether it comes from the government or friends and family.