Importing the poor - Welfare magnetism and cross-border welfare migration

I test for welfare-induced migration by comparing AFDC participation in border counties to interior counties within states. If migration costs are lower for border-county residents, border counties on the high-benefit side of a state border should have higher welfare participation relative to interior counties of the same state. Border counties on the low-benefit side should have lower welfare participation relative to interior counties of the same state. The results obtained using county-level data from 1970-90 indicate that having a neighbor with benefits that are $100 lower increases AFDC expenditures in border counties by 4.0-6.8 percent relative to interior counties.