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Are Youths on Income Support Less Happy? Evidence from Australia

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  • Wang-Sheng Lee

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Umut Oguzoglu

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

The central research question addressed in this paper 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 psychological 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.

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Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2007n03.

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Length: 19 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:iae:iaewps:wp2007n03

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Keywords: Well-being; happiness; welfare stigma; youths.;

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  1. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  2. Card, David & Sullivan, Daniel G, 1988. "Measuring the Effect of Subsidized Training Programs on Movements in and out of Employment," Econometrica, Econometric Society, vol. 56(3), pages 497-530, May.
  3. Alfred Michael Dockery, 2005. "The Happiness of Young Australians: Empirical Evidence on the Role of Labour Market Experience," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 322-335, December.
  4. Jeffrey M. Wooldridge, 2005. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 39-54.
  5. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
  6. Winkelmann, Rainer, 2006. "Parental separation and well-being of youths: Evidence from Germany," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(2), pages 197-208, April.
  7. Rafael Di Tella & Robert MacCulloch, 2006. "Some Uses of Happiness Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 25-46, Winter.
  8. Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
  9. Guyonne R. Kalb, 1999. "Labour Supply and Welfare Participation in Australian Two-Adult Households: Comparing 1986/87 with 1994/95," Centre of Policy Studies/IMPACT Centre Working Papers bp-34, Victoria University, Centre of Policy Studies/IMPACT Centre.
  10. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  11. Arulampalam, W., 1998. "A Note on Estimated Coefficients in Random Effects Probit Models," The Warwick Economics Research Paper Series (TWERPS) 520, University of Warwick, Department of Economics.
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Cited by:
  1. Chrostek, Pawel, 2013. "An empirical investigation into the determinants and persistence of happiness and life evaluation," MPRA Paper 50442, University Library of Munich, Germany.
  2. Chrostek, Pawel, 2013. "An empirical investigation into the determinants and persistence of different types of subjective well-being," MPRA Paper 48292, University Library of Munich, Germany.

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