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Did the 2007 Welfare Reforms for Low Income Parents in Australia Increase Welfare Exits?

Author

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  • Yin King Fok

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

  • Duncan McVicar

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

Abstract

This paper examines the impacts of recent Australian welfare to work reforms for low income parents of school-aged children who had been in receipt of Parenting Payment for at least one year. Specifically, the reforms introduced a requirement to engage in at least 15 hours of work-related activity per week from the youngest child’s seventh birthday. We find large positive impacts on the hazard rates for exiting welfare and for switching between welfare payments. As a consequence, over the first year of the new regime the Parenting Payment caseload for the parents in this cohort with a youngest child aged 6 at the start of the year fell by 23.5%; without activation we estimate it would have fallen by 18.5%. The reforms also offer a rare opportunity to compare impacts on single and partnered parents, with partnered parents shown to be more responsive.

Suggested Citation

  • Yin King Fok & Duncan McVicar, 2012. "Did the 2007 Welfare Reforms for Low Income Parents in Australia Increase Welfare Exits?," Melbourne Institute Working Paper Series wp2012n01, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2012n01
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    References listed on IDEAS

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    Cited by:

    1. R. G. Gregory, 2013. "The Henderson Question? The Melbourne Institute and fifty years of welfare policy," CEPR Discussion Papers 682, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    2. Bruce Bradbury & Anna Zhu, 2018. "Welfare Entry and Exit after Marital Separation among Australian Mothers," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 405-423, December.
    3. Duncan McVicar & Roger Wilkins, 2013. "Explaining the Growth in the Number of Recipients of the Disability Support Pension in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(3), pages 345-356, September.
    4. Li, Liming & Avendano, Mauricio, 2023. "Lone parents' employment policy and adolescents’ socioemotional development: Quasi-experimental evidence from a UK reform," Social Science & Medicine, Elsevier, vol. 320(C).
    5. Hayley Fisher & Anna Zhu, 2019. "The Effect of Changing Financial Incentives on Repartnering," The Economic Journal, Royal Economic Society, vol. 129(623), pages 2833-2866.
    6. Paul Redmond & Seamus McGuinness & Claire Keane, 2023. "The impact of one-parent family payment reforms on the labour market outcomes of lone parents," Oxford Economic Papers, Oxford University Press, vol. 75(2), pages 346-370.
    7. Avram, Silvia & Brewer, Mike & Salvatori, Andrea, 2018. "Can't work or won't work: Quasi-experimental evidence on work search requirements for single parents," Labour Economics, Elsevier, vol. 51(C), pages 63-85.
    8. Barbara Broadway & Tessa LoRiggio & Chris Ryan & Anna Zhu, 2022. "Literature review on the impact of welfare policy design on children and youth," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 809-840, September.
    9. Andrew Beer & Rebecca Bentley & Emma Baker & Kate Mason & Shelley Mallett & Anne Kavanagh & Tony LaMontagne, 2016. "Neoliberalism, economic restructuring and policy change: Precarious housing and precarious employment in Australia," Urban Studies, Urban Studies Journal Limited, vol. 53(8), pages 1542-1558, June.
    10. Morescalchi Andrea & Paruolo Paolo, 2020. "Too Much Stick for the Carrot? Job Search Requirements and Search Behaviour of Unemployment Benefit Claimants," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-21, January.

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    More about this item

    Keywords

    Welfare reform; welfare to work; activation; lone parents; labour supply; Australia;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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