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Transition Patterns for the Welfare Reliance of Low Income Mothers in Australia

Author

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  • Gong, Xiaodong

    () (NATSEM, University of Canberra)

Abstract

This paper analyzes the mobility of low income mothers in Australia between two groups of governmental transfer payments: Income support payments (IS) and Family Payments (FP, non-income support payments) only. While IS payments are to provide a subsistence of living for her, FP payments are to help low-medium income families with the costs of dependent children. We use a dynamic multinomial logit panel data model with random effects, explaining the reliance of each individual on the income support system during each quarter between 1997 and 2000. The data is drawn from the FaCS 1% Longitudinal Data Set (LDS), a sample of fortnightly administrative records of welfare payments in Australia. We find that both state dependence and unobserved heterogeneity play significant roles. We also find that single mothers and females with partners on income support payments are much more likely to be on income support than otherwise.

Suggested Citation

  • Gong, Xiaodong, 2004. "Transition Patterns for the Welfare Reliance of Low Income Mothers in Australia," IZA Discussion Papers 1047, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1047
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    References listed on IDEAS

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    1. Lee, Lung-Fei, 1992. "On Efficiency of Methods of Simulated Moments and Maximum Simulated Likelihood Estimation of Discrete Response Models," Econometric Theory, Cambridge University Press, vol. 8(04), pages 518-552, December.
    2. Barrett, Garry F, 2002. "The Dynamics of Participation in the Sole Parent Pension," The Economic Record, The Economic Society of Australia, vol. 78(240), pages 1-17, March.
    3. repec:cup:etheor:v:8:y:1992:i:4:p:518-52 is not listed on IDEAS
    4. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
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    Cited by:

    1. Martin Biewen, 2009. "Measuring state dependence in individual poverty histories when there is feedback to employment status and household composition," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(7), pages 1095-1116.
    2. Yi-Ping Tseng & Ha Vu & Roger Wilkins, 2008. "Dynamic Properties of Income Support Receipt in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(1), pages 32-55, March.
    3. Martin Biewen, 2004. "Measuring State Dependence in Individual Poverty Status: Are there Feedback Effects to Employment Decisions and Household Composition?," Discussion Papers of DIW Berlin 429, DIW Berlin, German Institute for Economic Research.
    4. Sebastian Königs, 2013. "The Dynamics of Social Assistance Benefit Receipt in Germany: State Dependence Before and After the Hartz Reforms," OECD Social, Employment and Migration Working Papers 136, OECD Publishing.

    More about this item

    Keywords

    mobility; panel data; welfare reliance; females;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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