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Income Support and Stigma Effects for Young Australians

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  • Wang-Sheng Lee
  • Umut Oguzoglu

Abstract

The central research question addressed in this article is how receipt of income support payments affects the well-being of youths. Using 1997-2004 panel data from a nationally representative survey of Australian youths, we attempt to estimate the size of the welfare stigma faced by Australian youths, where stigma is defined as the effect of welfare receipt on reported happiness levels. In analysing the determinants of happiness, we argue that it is important to control for dynamics and initial conditions. The latter arguably measures an initial setpoint of happiness which the psychology literature has found strong support for. In contrast to the general findings of the existence of a welfare stigma for adults, based on our results using dynamic panel probit models, our findings suggest that for Australian youths there is a small negative, but not statistically significant, stigma associated with welfare receipt. Copyright 2007 Bank of England.

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Bibliographic Info

Article provided by The University of Melbourne, Melbourne Institute of Applied Economic and Social Research in its journal Australian Economic Review.

Volume (Year): 40 (2007)
Issue (Month): 4 (December)
Pages: 369-384

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Handle: RePEc:bla:ausecr:v:40:y:2007:i:4:p:369-384

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Cited by:
  1. Arulampalam, Wiji & Stewart, Mark B., 2008. "Simplified Implementation of the Heckman Estimator of the Dynamic Probit Model and a Comparison with Alternative Estimators," The Warwick Economics Research Paper Series (TWERPS) 884, University of Warwick, Department of Economics.
  2. Lee, Wang-Sheng & Oguzoglu, Umut, 2007. "Well-Being and Ill-Being: A Bivariate Panel Data Analysis," IZA Discussion Papers 3108, Institute for the Study of Labor (IZA).
  3. Adrian Chadi, 2011. "Employed but Still Unhappy?: On the Relevance of the Social Work Norm," SOEPpapers on Multidisciplinary Panel Data Research 353, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Tony Beatton & Paul Frijters, 2012. "Unhappy Young Australians: a domain approach to explain life satisfaction change in children," School of Economics and Finance Discussion Papers and Working Papers Series 289, School of Economics and Finance, Queensland University of Technology.

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