A Caltech Library Service

Welfare Magnets, the Labor-Leisure Decision and Economic Efficiency


Saving, Jason Lee (1996) Welfare Magnets, the Labor-Leisure Decision and Economic Efficiency. Dissertation (Ph.D.), California Institute of Technology. doi:10.7907/sxj0-3216.


This thesis examines the issue of welfare recipiency. In the first chapter, I develop a model designed to capture the fiscal externalities associated with redistributive policy in a system of jurisdictions. Previous work in the migration literature ignores work-disincentive effects and concludes that relatively generous jurisdictions will attract welfare recipients but repel workers. I present a model that integrates migration with labor-leisure choice and I find that inclusion of labor-leisure effects unambiguously worsens the fiscal externalities of redistribution. In addition, I derive conditions under which an increase in redistribution will harm its beneficiaries.

In the second chapter,I address the issue of benefit harmonization. Within both the European Union and the United States, advocates of redistribution have suggested that benefits be "harmonized" at levels offered by their most generous members in order to protect those members from the fiscal externalities associated with redistribution, and these advocates. further suggest that such a harmonization would enhance economic efficiency. The economic-efficiency argument is bolstered by traditional work in the public finance literature, but the work from which this conclusion is drawn does not account for the work-disincentive effects associated with redistributive policy. I find that, when work-disincentive effects are considered, the process of benefit harmonization need not improve economic efficiency unless the level at which benefits are harmonized is sufficiently low.

Item Type:Thesis (Dissertation (Ph.D.))
Subject Keywords:Social Science
Degree Grantor:California Institute of Technology
Division:Humanities and Social Sciences
Major Option:Social Science
Thesis Availability:Public (worldwide access)
Research Advisor(s):
  • Palfrey, Thomas R. (advisor)
  • Davis, Lance E. (co-advisor)
Thesis Committee:
  • Palfrey, Thomas R. (chair)
  • Alvarez, R. Michael
  • Katz, Jonathan N.
  • Ledyard, John O.
  • Davis, Lance E.
Defense Date:16 August 1995
Additional Information:Thesis file (PDF) missing pp. v, 1, and 63.
Record Number:CaltechTHESIS:06292020-131040227
Persistent URL:
Default Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:13828
Deposited By: Kathy Johnson
Deposited On:29 Jun 2020 20:19
Last Modified:02 Dec 2020 02:30

Thesis Files

PDF - Final Version
See Usage Policy.


Repository Staff Only: item control page