Poster #99 - Residency Requirements in Welfare Policy: Implications for Migration and Economic Mobility

• In Event: Friday Poster Reception

Abstract

Migration is often linked to increased economic opportunity, yet policy can create barriers that disproportionately affect low-income populations. This paper studies one such barrier: the introduction of residency restrictions in U.S. state welfare policy. These laws imposed minimum residency thresholds for welfare eligibility with the aim of discouraging low-income migration and improving fiscal capacity for state and local governments. I examine how the adoption of state residency requirements affected spatial and economic mobility among low-income populations in the historical United States.

To study these policies, I construct a novel dataset on the adoption and evolution of residency requirements across state and local governments from 1850 to 1940. I then combine this with data on migration and economic outcomes from the complete-count U.S. Census. Exploiting staggered policy adoption across states, I estimate the effects of residency requirements on low-income interstate migration using a difference-in-differences framework. I find that residency restrictions led to a 20% decline in migration into restricted states (a 2 percentage point decline relative to baseline migration rates). This effect is driven entirely by individuals at the bottom of the occupational income distribution, consistent with the intended goals of the policy. Reductions are largest for migration between more distant states with weaker pre-existing ties, suggesting that migrant networks may mitigate the impact of these policies. I also find evidence of reduced intrastate migration in areas with local residency requirements, indicating both across- and within-state migration effects.

I then use a discrete-choice model of migration to decompose these effects into changes in the propensity to migrate and changes in destination choice conditional on moving. The results indicate both increased non-migration (staying) and a reallocation of low-income migrants across destinations. Using the estimated model, I quantify which states are most affected by these shifts and discuss the broader implications for the spatial distribution of low-income populations over time.

Finally, I examine the effects of residency requirements on economic mobility. For movers into restricted states, there are no effects on upward mobility following policy adoption, suggesting offsetting forces between restricted access to public benefits and positive selection into migration. In contrast, I find lower rates of economic mobility in origin states with larger increases in non-migration following these policies. This suggests that residency requirements may have altered selection into moving versus staying in a way that reduced economic opportunity for low-income populations. Overall, these findings highlight how restrictions in welfare policy can affect both migration patterns and economic mobility, providing new insights into how social policy design shapes spatial inequality.

Author

• Catherine O'Donnell, Boston University
  Presenting Author