Overcoming Financial Constraints and Migrating Out of Rural and Distressed America

There is a strong and growing interest in helping families move to areas with higher economic opportunity. We exploit variation in the Earned Income Tax Credit (EITC) to examine how relaxing budget constraints affects migration, with a focus on women from rural and economically distressed areas. We find that relaxing budget constraints increases migration out of rural and distressed areas, to areas with higher labor force participation and lower unemployment rates. Many of these moves occur across counties or commuting zones, but we find no effect on moving across states. We also find decreases in living doubled up with another family, and reductions in commute length. We are the first to show that the EITC relaxes budget and credit constraints and helps women move to economic opportunity