Second Quarter 1997
Federal Reserve Bank of Dallas

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Welfare and the Locational Choices of New Immigrants
Madeline Zavodny

The 1996 welfare law ends most noncitizens' eligibility for federally funded public assistance programs and allows states to cut off payments under other welfare programs to noncitizens. If some states choose to continue extending benefits while others terminate payments to immigrants, interstate differentials in welfare generosity will widen. Potential policy differences create concern that states that continue to offer benefits to immigrants will become welfare magnets.

In this article, Madeline Zavodny examines whether welfare generosity is correlated with the number of new immigrants arriving in a state in 1982 and 1992. The data indicate that welfare payments are not correlated with immigration levels; rather, the presence of earlier immigrants is the primary determinant of the locational choices of new immigrants.

Output, Growth, Welfare, and Inflation: A Survey
Joseph H. Haslag

In this article, Joseph Haslag surveys both the theoretical results and the empirical evidence relating inflation to per capita real GDP growth. Theory yields mixed results: a permanent change in inflation can raise, lower, or have no impact on per capita output or its rate of growth. The crucial factor seems to be the role money plays in the model economy. However, in most cases, a permanent increase in inflation lowers the average person's welfare. The empirical evidence is similarly inconclusive. A body of evidence suggests that high-inflation countries do grow more slowly than low-inflation countries. However, the systematic relationship between inflation and output growth does not survive when researchers include other potential determinants of growth or adopt an alternative definition of trend.