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Unintended Consequences of Welfare Reform: Evidence from Birth Outcomes of Aboriginal Australians

Author

Listed:
  • Doyle, Mary-Alice

    (London School of Economics)

  • Schurer, Stefanie

    (University of Sydney)

  • Silburn, Sven

    (Menzies School of Health Research)

Abstract

Australia's 'income management' policy requires benefit recipients to spend at least half of their government transfers on essentials (e.g. food, housing). We estimate income management's impact on birth outcomes by exploiting its staggered rollout. By changing parents' consumption patterns, the policy aims to improve child outcomes. We find no evidence of this. Instead, our estimates suggest it reduced average birthweight by 95 grams and increased the probability of low birthweight by 3 percentage points. We explore the mechanisms that may explain this finding. Our study demonstrates how policies that are not carefully implemented and tested can unintentionally escalate existing inequalities.

Suggested Citation

  • Doyle, Mary-Alice & Schurer, Stefanie & Silburn, Sven, 2020. "Unintended Consequences of Welfare Reform: Evidence from Birth Outcomes of Aboriginal Australians," IZA Discussion Papers 13543, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13543
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    References listed on IDEAS

    as
    1. Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2009. "Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 109-139, October.
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    4. Hoynes, Hilary & Page, Marianne & Stevens, Ann Huff, 2011. "Can targeted transfers improve birth outcomes?: Evidence from the introduction of the WIC program," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 813-827, August.
    5. Jesse M. Cunha, 2014. "Testing Paternalism: Cash versus In-Kind Transfers," American Economic Journal: Applied Economics, American Economic Association, vol. 6(2), pages 195-230, April.
    6. Deborah A. Cobb-Clark & Nathan Kettlewell & Stefanie Schurer & Sven Silburn, 2023. "The Effect of Quarantining Welfare on School Attendance in Indigenous Communities," Journal of Human Resources, University of Wisconsin Press, vol. 58(6), pages 2072-2110.
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    More about this item

    Keywords

    welfare reform; Aboriginal children; birth outcomes; 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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