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Unintended consequences of welfare reform: Evidence from birthweight of Aboriginal children in Australia

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  • Doyle, Mary-Alice
  • Schurer, Stefanie
  • Silburn, Sven

Abstract

In 2007, Australia introduced its most radical welfare reform in recent history, targeting Aboriginal communities with the aim of protecting children from harm. The ‘income management’ policy forced Aboriginal welfare recipients to spend at least half of their government transfers on essentials (e.g. food, housing), and less on non-essentials (e.g. alcohol, tobacco). By exploiting its staggered rollout, we estimate the impact of in utero exposure to the policy rollout on birthweight. We find that exposure to the income management policy reduced average birthweight robustly by 85 g and increased the risk of low birth weight by 3 percentage points. This finding is not explained by behavioral change (fertility, maternal risk behavior, access to care), or survival probabilities of at-risk fetuses. More likely, a lack of policy implementation planning and infrastructure led to acute income insecurity and stress during the rollout period, exacerbating the existing health inequalities it sought to address.

Suggested Citation

  • Doyle, Mary-Alice & Schurer, Stefanie & Silburn, Sven, 2022. "Unintended consequences of welfare reform: Evidence from birthweight of Aboriginal children in Australia," Journal of Health Economics, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:jhecon:v:84:y:2022:i:c:s0167629622000388
    DOI: 10.1016/j.jhealeco.2022.102618
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    More about this item

    Keywords

    Welfare reform; Aboriginal children; Birthweight; Income management; Unintended consequences;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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