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Intergenerational Welfare Participation in New Zealand

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  • Maloney, Tim
  • Maani, Sholeh
  • Pacheco, Gael

Abstract

New Zealand panel data, which provide extensive information on the benefit histories of children and their parents, is used to estimate an intergenerational correlation coefficient in welfare participation. Recent estimation techniques for addressing issues of measurement error are applied in this analysis (Zimmerman 1992, Solon 1992, Bjorklund and Jantti 1997, Couch, D. and T. Dunn 1997, Auginbaugh, 2000). The long-term benefit histories of parents and instrumental variable techniques provide lower and upper-bound estimates of the true intergenerational correlation. A remarkably narrow band is estimated for this parameter, placing this correlation coefficient at slightly less than 0.4. Approximately one-third of this effect appears to operate through the lower educational attainment of children reared in families receiving social welfare benefits.

Suggested Citation

  • Maloney, Tim & Maani, Sholeh & Pacheco, Gael, 2002. "Intergenerational Welfare Participation in New Zealand," Working Papers 212, Department of Economics, The University of Auckland.
    • Handle: RePEc:auc:wpaper:212
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    1. Levine, Phillip B. & Zimmerman, David J., 2005. "Children's welfare exposure and subsequent development," Journal of Public Economics, Elsevier, vol. 89(1), pages 31-56, January.
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    2. Nicolas Hérault & Guyonne Kalb, 2016. "Intergenerational correlation of labor market outcomes," Review of Economics of the Household, Springer, vol. 14(1), pages 231-249, March.
    3. Edmark, Karin & Hanspers, Kajsa, 2011. "Is welfare dependency inherited? Estimating the causal welfare transmission effects using Swedish sibling data," Working Paper Series 2011:25, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.

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