Is California’s Welfare System Luring the Poor? : Aid: High benefits give political appeal to idea that state attracts recipients. But little evidence supports the theory.

Gov. Pete Wilson’s politically potent contention that California’s generous welfare benefits have made the state a magnet for poor migrants has little evidence to support it and experts say the claim overstates the impact of welfare payments on migration.

In fact, the state’s only figures show that the number of welfare recipients moving to California dwindled between 1986 and 1990.

Wilson is using the issue of welfare migration as a key argument in his promotion of a sweeping November ballot initiative designed to cut costs and hold down the growth of the state welfare system. Wilson says that California is suffering from long-term economic problems and cannot afford to succor the poor from the rest of the nation.

“The bottom line is, I’m trying to stop California from being a welfare magnet,” Wilson told audiences in January as he campaigned for his initiative in the San Fernando Valley. The week before in his State of the State address to the Legislature, he urged lawmakers to adopt his welfare proposals, saying: “California can no longer afford to be a welfare magnet.”

The magnet argument has wide appeal, tapping voter discontent with a welfare system that allows benefits to vary so widely among states that California, which pays a basic monthly grant of $663 to a family of three, can offer more than triple the grant of Texas, which pays $184.

Even Democrats, the traditional protectors of the poor, were quick to endorse Wilson’s suggested cuts in benefits to newcomers, although the Wilson Administration estimates that the savings would only be $15 million a year--less than 1% of the state’s $2.5-billion welfare budget.

On March 9, Democrats joined Republicans as the Assembly voted 54 to 14 to approve a measure by Assemblyman Jim Costa (D-Fresno) that mirrored Wilson’s proposal. The bill would restrict newcomers’ benefits to levels paid by their former home state for their first year of California residency.

Last week, Senate Democrats proposed to pay new arrivals a rate equal to the average of the benefits paid by the other 49 states ($390 a month for a family of three).

“I think Gov. Wilson is riding a cresting wave of public support,” said Martin Anderson, former adviser on welfare policy to Presidents Richard M. Nixon, Gerald Ford and Ronald Reagan and now a senior fellow at the Hoover Institution. “The American public supports welfare for people who can’t take care of themselves. . . . At the same time, they feel too much money is spent on welfare.”

But is there any proof that California’s welfare benefits are attracting poor people from out of state?

In his speeches, Wilson discusses the magnet effect as if it were a fact. When pressed to support the contention, his aides and key members of his Administration cite a 1990 survey showing that some welfare recipients moved from other states where they were receiving public assistance. They conclude from this study that the size of California’s welfare benefits played a role in the decision of those poor families to move here and contributed to the substantial growth of California’s welfare rolls in recent years.

Scholars question that conclusion. They point out that there are many reasons for moving from place to place and that, without deeper investigation, there is no way to determine whether newcomers came here to find jobs, to be near family, to enjoy a warmer climate or to collect higher welfare benefits.

Academic research, mostly in other states, shows that higher benefits have some attraction for the poor but that the benefits’ overall effect on migration is small.

“Some people move for benefits,” said Eugene Smolensky, dean of the Graduate School of Public Policy at UC Berkeley. “(But) none of these numbers are large.”

The experts also note that any study of welfare migration is incomplete without studying how many of California’s welfare recipients moved to other states.

The 1990 survey cited by Wilson shows 7% of the people receiving Aid to Families With Dependent Children--the federal-state program that provides cash grants to support poor children--have come from another state within the year before going on welfare. The same survey reports nearly half of these people--or 3%--collected AFDC benefits in the state from which they came.

The study was based on a survey of 1,184 AFDC recipients out of the 659,648 families then receiving the aid.

Yet a similar survey conducted in 1986 had produced higher migration percentages than the 1990 study. The data from the two studies suggests that migration of the poor to California has slowed since 1986.

In the 1986 survey, 8% of the state’s welfare recipients had moved to California during the previous year. More than half of these people--or 5%--had collected AFDC in their former states.

Neither study determined how many, or whether any, of the newcomers moved to California for higher welfare benefits. Neither survey included interviews with families about their reason for moving to California.

Nor did the surveys try to determine how many of California’s welfare recipients left the state.

“Any migration classically involves two-way movement. It’s never a one-way street,” said Diana Pearce, a visiting scholar at Stanford University. “You can’t begin to measure the net impact of migration without knowing how many move out as well as how many move in.”

Indeed, there is evidence that a number of California residents are moving to other states and going on welfare. Research by the Washington State Institute for Public Policy, a study group created by the Legislature to advise state policy-makers, found that more than a fifth of the out-of-state people who applied for welfare within a year of moving to Washington came from California.

Russell Gould, Wilson’s secretary of health and human services, acknowledged that the state’s data on migration is incomplete but said the survey is “the best information available.” He said he believed that it was adequate to support Wilson’s proposal to limit benefits to newcomers.

He also argued that the high growth of California welfare rolls in recent years is an indication that its welfare rates are attracting arrivals.

However, there is no evidence that California’s welfare rolls are growing faster than those of many states with lower benefits. In an examination of welfare caseload growth from July, 1989, through last November, the American Public Welfare Assn. ranked California’s growth rate 21st among the states.

The association’s ranking showed that California’s rolls had grown 29% in that period but, in Nevada, which pays $372 in maximum monthly benefits to a family of three, the growth was 51%, and in Oregon, which pays $460, the growth was 33%.

Many of the low-benefit Southern states also experienced a growth explosion greater than California’s. In Florida, where monthly benefits are $303 for a family of three, the growth was 63% and in Tennessee, which pays benefits of $185 a month, growth was 32%. Texas welfare rolls grew by 40%.

At a hearing in February before the Assembly Human Services Committee, Robert Horel, deputy director of the Department of Social Services, conceded during an exchange with Assemblyman Xavier Becerra (D-Monterey Park) that the state had no data to show the impact of higher welfare benefits on the migration of poor people to California.

Horel had just testified that “we do know that people are coming here for high welfare grants,” when Becerra asked what evidence he had to support his testimony.

The evidence, Horel said, was “based on conversations I’ve had with people who have said to me that was a major factor in moving to California.”

“How many conversations have you had?” Becerra pressed.

“A small number,” Horel said. “Less than five.”

Gould, Wilson’s secretary of welfare, said the Administration readily concedes that migration to California is not the dominant factor influencing the high growth of the state’s welfare rolls. Although state officials have no research that shows poor people come to California to get higher benefits, they believe that higher benefits must have some influence on the burgeoning caseload, Gould said.

“I think what we believe is that it is a factor and what we’re trying to do is assess what’s appropriate public policy” to deal with it, he said. “Should there be a bonus provided for individuals who relocate to California in contrast to what they might have received had they stayed in the state they were in previously?”

The answer, he said, is no.

For whatever reason poor people move to California, if they accept aid shortly after arriving they should not be entitled to benefits higher than those in their home state, Gould said.

Gould’s portrayal of California as a welfare magnet is a familiar one. The argument has surfaced often in other high-benefit states.

As states increasingly face revenue shortages, more political figures have been voicing their concern that neighboring states may be exporting their poor.

Vermont, Wisconsin, Connecticut, New York, Oklahoma and Washington are among the states whose officials say are welfare magnets.

Several states have conducted research to measure the effect of higher benefits on the migration of the poor but the findings were generally as inconclusive as the work of academics who studied the subject.

In Washington, a study of welfare migration found 13% of those on public assistance in 1988 had moved into the state within a year. However, the study also found that nearly a third of the newcomers came from states such as California, which had higher welfare benefits than Washington.

“What we know about poor people is that they move a lot,” said Smolensky of UC Berkeley. “There is a lot of churning.”

With such wide variations in welfare rates--often between bordering states--it is surprising that the disparity in rates does not have a greater impact on migration, Smolensky said. The fact that it has not, he said, is an indication that other factors--such as jobs and family ties--have a much larger influence on a poor family’s decision to migrate than the differences in welfare rates.

Benefit-driven migration “clearly happens and it’s clearly very small and the opportunities to do this are enormous,” Smolensky said.

“The existence of welfare magnets is widespread. There are a lot of places where you can go a short distance and dramatically increase your welfare benefits.

“In Kansas City, you just have to walk across the . . . bridge from Missouri to Kansas to get $130 more a month, yet a lot of people are still getting benefits in Kansas City, Mo., and aren’t walking across the bridge.”

Rebecca Blank, an associate professor and economist at Northwestern University who has conducted some of the major studies of migration, said it is difficult to separate wages from welfare as incentives for moving. Most of the states that offer high welfare benefits also tend to have stronger economic environments. Thus, if a poor family is moving for economic reasons, it is just as likely to be moving for jobs as for welfare benefits, she said.

A different interpretation is offered by Paul Peterson, director of the Center for American Political Studies at Harvard University and co-author of “Welfare Magnets,” a study for the Brookings Institution. Peterson believes that the “modest” effect higher welfare benefits have on migration can be significant over time.

He found that high-benefit states not only attract poor families but tend also to discourage those within the state from moving. He said his data showed that in a 10-year period the welfare magnet effect would have caused the number of poor people in a high-benefit state to have grown by about 1%.

“That’s not a small figure. That can be quite a large number. It’s enough of a factor that politicians are not being entirely unreasonable to be concerned about it,” he said. “I have a feeling they tend to exaggerate the effect but it is not an unreasonable concern.”

Peterson, who argues that the federal government should remove some of disparity by establishing a basic national AFDC rate, said it pains him to see states lower benefits for new residents but he understands why they do it.

Blank and Smolensky predict that California officials will find that if they penalize newcomers it will have little effect on migration patterns of the poor. “I just don’t think it’s going to make much of a difference,” Blank said. “People just move for a lot of reasons that are not economically related.”

New to California

Following is a comparison of recipients of Aid to Families With Dependent Children (AFDC) who were newly arrived in California.

1986 1990 Total recipients 577,132 659,649 Lived out of state 47,588 (8.2%) 43,722 (6.6%) within the year Rec’d AFDC there 26,789 (4.5%) 19,552 (3%)

Rise in Welfare Families

Here is a look at the caseload growth in the Aid to Families With Dependent Children programs in the 12 states with the largest welfare caseloads in 1991. The states are ranked according to the percentage of growth, with the number of families in thousands.

No. of No. of Percent families families Change STATE JULY 1989 NOV. 1991 *Florida 121.6 198.2 63.0% *North Carolina 78.3 115.6 47.6% *Georgia 93.1 132.0 41.8% *Texas 183.6 257.3 40.1% *California 604.7 780.4 29.1% *Massachusetts 87.6 110.5 26.1% *New Jersey 100.1 122.7 22.6% *Ohio 218.6 256.2 17.2% *New York 336.6 391.0 16.2% *Illinois 198.5 228.6 15.2% *Pennsylvania 173.5 198.6 14.5% *Michigan 210.2 225.5 7.3 % *United States 3,746.1 4,647.5 24.1%

SOURCE: American Public Welfare Assn.

Unwelcome Arrivals

California isn’t the only state that thinks it’s a welfare magnet. Here are some of the others:

* Vermont: As neighboring New Hampshire copes with an economic depression, Vermont officials have raised concerns that its poor are flocking into their state to take advantage of higher welfare benefits.

* Wisconsin: In the Badger State, officeholders complain that the poor are flooding across the border from Illinois to escape the crime in inner city Chicago and gain higher welfare benefits.

* New York: With higher benefits than neighboring states, New Yorkers think their state has become a magnet for welfare recipients from New Jersey and Pennsylvania, as well as Puerto Rico.

* Washington: In Washington, lawmakers have complained that generous welfare benefits are attracting the poor from Idaho and Oregon.