A Wider Race? Interstate Competition across Health and Welfare Programs

TLDR

Most analyses focus on AFDC benefit levels, but the welfare‑reducing logic of interstate competition should apply to all redistributive programs. The study tests whether interstate competition reduces welfare generosity across multiple programs, including AFDC, Medicaid, and SSI‑S. The authors examine competitive effects by analyzing several measures of welfare generosity for AFDC, Medicaid, and SSI‑S. Evidence shows interstate competition across multiple programs and measures, with effect variation aligning with differing political debates.

Abstract

Does interstate competition reduce welfare generosity? Most analyses of this question focus on Aid to Families with Dependent Children (AFDC) benefit levels. The welfare-reducing logic of interstate competition should apply to all redistributive programs, however. We test for competitive effects more generally, examining several measures of welfare generosity for AFDC, Medicaid, and Supplemental Security Income-State (SSI-S) policy. We find evidence of interstate competition across multiple programs and measures over which states have authority. We also find variation in the effects that is consistent with variation in political debates across the programs.