Andrew Leigh advises readers of a rather interesting event at ANU - a public lecture from an American academic on the lessons for Australia of quarantining welfare payments from the US experience. I was prompted to post a comment hoping that a transcript might be made available, and wondering if there was any easy reference point - for instance a lit review - for the American evidence. I decided to try to answer my own question, and not finding a lit review while trawling through a couple of academic databases, nevertheless located a couple of fascinating papers. There is a fair bit of research on food stamps, and some can be found in a link from Andrew’s post, but I decided that I’d look, in the absence of enough time to do a thorough lit review myself, for papers on the relationship between welfare and child outcomes. Both papers that I found were based on large data sets and bivariate statistics. Both raise some interesting questions about the evidence on which the proposed welfare changes are based (if there is any, and that’s a question I’ll come to as well).
Welfare receipt often is correlated negatively with children’s cognitive and behavioral outcomes. Yet, virtually all children in households that receive public assistance are poor, prompting the question of whether poor outcomes are an effect of welfare, a spurious relationship between welfare and child outcomes, or a result of welfare selection. Using the NLSY-CS, these possibilities are examined by controlling for poverty and for selection into welfare. Controlling for child and maternal characteristics accounts for the majority of bivariate associations between welfare and outcomes among Black children. Controlling for poverty does little to change the relationship between welfare and outcomes for Black or White children. Controlling for selection into welfare further reduces the relationship between welfare receipt and outcomes among White children and has little discernible effect among Black children
That’s from Driscoll, A. & Mooore, K., ‘The relationship of welfare receipt to child outcomes’, Journal of Family and Economic Issues. New York: Spring 1999. Vol.20, Iss. 1.
The take-out message comes from the second paper:
Background differences and early experiences explain most of the associations between welfare and poverty.
Moore, K., Glei, D., Driscoll, A., Zaslow, M. & Redd, Z., ‘Poverty and welfare patterns: Implications for children’, Journal of Social Policy. Cambridge: Apr 2002. Vol.31 Part 2. pg. 207, 21 pgs.
To cut a long story short, kids on welfare have poor cognitive and behavioural outcomes not because they’re on welfare but because they’re poor, and because their mothers are poor. (Note that in the US, “welfare” means “Aid to Dependent Children” and is a programme for parents, and most are mothers).
I’m simplifying, of course, and I’m sure I’d find some other results if I looked more widely in the literature, though I suspect “welfare dependency” might be a bit of a myth when it comes to child outcomes. That is to say, while the question of moving people from welfare into work is a separate one, it gets confused with outcomes which are caused largely by poverty as such and not by any effects of welfare itself.
Next, I went looking to see what research papers were posted on the FaCSIA website (Brough’s department) which would make the case for the effects of quarantining welfare.
I was intrigued to find under the section Social Support System–Research that clicking on Parenting–Child Abuse Prevention produces this result:
Whether or not a document has been removed from the site, I can’t say.
Going to the link to the Emergency Response to protect Aboriginal children in the NT leads to a stack of links to Brough’s press releases. No research there. Going through to the link to a longitudinal study of Indigenous children doesn’t provide much enlightenment either, as the research appears to be at a relatively early stage.
I did find a lit review on child poverty by Bruce Bradbury, commissioned by the Department in 2003. I’ll quote the section I found relevant at some length, because it’s important:
The research results discussed above consider the impact of childhood family income on children’s outcomes. Where possible, this research has attempted to describe the impact of income whilst holding parental (or at least mother’s) labour force status constant. This is important, because, as noted in Section 1.4, an increase in parental employment might have a direct impact on children’s consumption via reductions in parenting time.
This poses a dilemma for anti-poverty policy. Increasingly, many countries are turning to employment as the solution to child poverty. As well as increasing incomes, parental employment is hypothesised to produce favourable role models. This policy trend is evident in the recent welfare reform initiatives in Australia, the US and the UK. Arguably, the success of many European countries in maintaining low levels of child poverty is due to their success in maintaining parental employment (see Section 4).
In the US and Canada, several large scale experiments have been undertaken over the last decade evaluating policies designed to increase employment among lone parents. Morris et. al (2001) review 11 studies that examine the impact of welfare reform initiatives on outcomes for children (see also Duncan & Chase-Lansdale 2000). The children in these studies were aged between three and nine when the policy intervention designed to increase their mother’s employment took place. They were followed up two to three years later and outcome measures such as school achievement, behaviour and health were evaluated. All studies used a random assignment experimental design.
All of the program interventions led to an increase in the mother’s employment. For interventions that relied on mandatory employment participation or time limits, the increase in parental income was often minimal (because of child care costs and low wages). Other programs included employment subsidies, leading to a substantial increase in income. There was substantial variation in child outcomes which depended on the precise features of each program.
On average, programs that increased employment without increasing incomes had no impact on child outcomes. Some programs had small positive and some small negative outcomes. Programs that led to increases in incomes as well as employment generally had positive impacts on child achievement. However, these were small compared to the average level of disadvantage of these children. As noted above, most of these studies included children from pre-school to upper primary school age (to use Australian terminology). There was insufficient evidence to draw conclusions on outcomes for children aged below three.
Two studies that looked at older children did find some negative outcomes of increased parental employment (though the effect size was not large). Brooks et. al (2001) hypothesise that these negative results for older children are due to either reduced quality of parent-child relationships (because of increased parental stress), reduced parental supervision or an increase in adolescents’ responsibilities within the family. Their review of the experimental evidence finds some degree of support for all three hypotheses.
Taking these results at face value, they seem to support the hypothesis that money does matter, although the magnitude of impact is still unclear. Any loss of parenting time associated with employment generally had negligible impacts on child outcomes, except possibly for older children. This conclusion is likely to be sensitive to the precise nature of the care substitutes, but the overall result is generally encouraging for anti-poverty policy. When money income did increase along with employment, child outcome measures improved for pre-adolescent children, though there remains a concern about impacts on older children.
These studies have only addressed outcomes over a relative short time span (two to three years). However, in combination with the research results discussed in Section 2.1, they provide some grounds for optimism that programs which increase family incomes will have favourable long-term outcomes for children. But the strength of the impact may be lower than simple observations might suggest.
Finally, it is important to recall the points raised at the beginning of Section 2. A concern with children’s later outcomes is not the only reason we should be concerned with child poverty. The living standards of children, as children, should also count.
Those findings are consistent with the other American studies I’ve cited - it’s income that matters, not whether the parent is on welfare or in employment. Of course, entering employment - if it’s substantially better paid - is going to produce better outcomes. If it’s not, it won’t be a panacea - and it’s worth noting the impact of working up to fifteen hours a week to continue to receive parental benefits as now required is likely to be minimal in terms of income gains, and also by definition because of the way the government has designed the programme, impact on older children, with the possible negative effects identified in the American research.
Reducing income would, one would imagine, be deleterious, though that would be subject to the research on the effects on food consumption of quarantining welfare that I haven’t looked at.
All this begs yet another question.
Has the government thought through whether the primary direction of these changes is to impact on parental behaviour or to improve child outcomes? If the former, there may not necessarily be an effect on the latter. Neither this question, nor the question as to whether the stick approach (I’m not seeing any carrots yet) will work either to change parental behaviour or to improve child outcomes appears to be answered by the material the government has either commissioned or developed in house.
Perhaps I’m missing something, but this is my main point - what we are seeing may not work. There appears to be no evidence for its working. Some evidence suggests that it might not. The desired result (parental behaviour or child outcomes?) appears not to have been thought through.
It’s difficult to escape the conclusion that the changes to welfare across all sectors of the community have been piggy-backed on the Indigenous emergency without too much examination of their likely effects. That appears to have been obscured so far by the “at least do something” argument and the moralistic and partisan tone of those advocating these policies.
Certainly, there appears to have been very little debate about the broader welfare changes beyond the Northern Territory Indigenous communities.
Note again that I’m not saying there may not be other studies which suggest that these policies might be viable. What I’m pointing to is the fact that if they exist, the government doesn’t either appear to be aware of them or to care at all for evidence based policy. Nor have Ministers been arguing an evidence based case.
I’ll next be having a look - for a separate piece I’m writing - at Noel Pearson’s report to see whether it provides any evidence for the welfare changes. Perhaps it does. I hope it does. Otherwise there’s a whole heap of empty moralising and political rhetoric driving these “reforms” and no guarantee that they will work. We should at least be debating whether they will, and I’d very much welcome any input, and in particular any input from those more knowledgeable about this aspect of social policy than I.
It’s important to remember that Pearson’s report was a small scale trial. From page 165 onwards of CYI’s _From Hand Out to Hand Up_ is the literature review of previous domestic and international programs that Pearson sees as analogous to his proposed project. It is largely very sketchy, and if anything substantiates the experimental status of that program.
“There is as yet no unequivocal evidence as to how conditional government transfers address the broad range of challenges facing communities with poor levels of capabilities and social indicators on their own” (178-9). Note the “conditional … transfers”. Much of the international evidence the CYI is drawing on is from the institution of payments as “reward” for positive behaviour where there was no pre-existing payment system, which as they note is a different situation to mediating already existing welfare payments.
It also might be worthwhile emphasising that while he has endorsed Howard’s intervention on the basis of necessity, his proposal is strongly localised and in that respect differs in strategy from Howard’s federalised approach to normfare.
Yes, both those points had occurred to me, influxus, though I’d been hoping that the lit review in his report might be stronger.
Found this report that is a little sceptical about the whole deal. It turns iut that most of the positive spin about their success is actually savings made to Government from creating a whole class of people who have neither work or welfare.
The training component of re skilling people or if they are fortunate enough to have someone else in the family land a higher paying job seem to be the main determinators of whether a family can be lifted out of poverty.
Report is here.
Summary:But, an honest assessment of the last ten years also shows that our safety net for the poorest
families with children has weakened dramatically and left some families in very difficult
circumstances. The seldom told truth about the dramatic caseload decline is that more than half of
the caseload decline is attributable to the fact that TANF assistance programs now serve a far
smaller share of those poor enough to qualify for the program. With some one million single
mothers — with some 2 million children — in an average month being both jobless and without
income assistance from TANF, other cash aid programs, or other household members, it is clear
that much work remains to be done.
Over the next ten years, the real test of success will be whether states and the federal government
can find ways simultaneously improve on three fronts: ensuring that needed income support is
provided to the poorest children, helping those with the greatest problems find jobs, and assisting
those at the bottom rungs of the labor market get the skills they need to advance. Without progress
in all three areas, a group of very poor families will go without the help they need to make ends meet
and another group of poor and near-poor families will work but fail to “get ahead.”
Here is a more upbeat report on the effects of welfare reform on children’s academic results which I will read more carefully later.
Food stamps are not the answer for the huge problems that beset indigenous communities. There has to be a wholesale change in the attitude of both the white and black community. Pride is a word that seems to have merit.
We have listened to excuses for far too long!
Is anyone suggesting that shifting the parents into low paid work will benefit the children?
I think the reforms are aimed at creating a deterrent effect to coerce parents to provide basic conditions necessary for the child’s development… I doubt it will work, but…
Well, yes. That’s the whole tenor of the rhetoric behind the “reforms” to parenting benefit.
Any examples?
Just about anything Joe Hockey said about it when he was responsible as Minister.
Quarantining welfare payments while having an intuitive appeal - children get to eat - has the same downside as passive welfare. It even further removes the welfare recipient from the market, which reduces their social interaction and decision-making opportunities. To wit, they become even more anti-social and marginalised.
Learned helplessness is the great curse of all socialist experiments.
Well, yes. That’s the whole tenor of the rhetoric behind the “reforms� to parenting benefit.
Does getting into low paid work increase your chance of getting higher paid jobs later, or is it better to wait until you have more time available (say when children are even older) and then attempt to get into the job market?
Sorry I meant to quote Mark on my previous message. The preview area lied about how it would look…..
If Joe Hockey made that suggestion, I think it is extremely silly…
But still that isn’t the general tenor behind the quarantining thing…
Apologies for what turned out to be a long post - and it is more about encouraging employment than about indigenous welfare issues.
This may be of interest for the debate about welfare reform and child poverty:
http://www.oecd.org/dataoecd/30/44/38227981.pdf
Our argument is that all countries with low child poverty combine effective redistribution with low levels of family joblessness. Australia has one of the most effective systems of redistribution towards poor families in the OECD, but one of the highest levels of joblessness among families with children, so that it ends up with only a slightly lower than average level of child poverty.
In addition, in nearly all OECD countries, families without jobs are by a long way the worst off, having much higher poverty rates and average incomes that are less than half the overall average for all families.
So the general principle of encouraging and supporting families into employment is a good idea, particularly in Australia because the family benefit system (and the minimum wage) is the most effective in the OECD in reducing child poverty among working families. This is not the case in the United States, for example, where the minimum wage is much lower and the level of in-work family benefits is also much lower than in Australia (despite what everyone says about the US earned income tax credit). In fact a full-time working lone parent on the minimum wage and receiving all their family benefits in Australia would have an equivalent income that is around 83% of the median, whereas in the US, a similar lone parent would have an income that is only 36% of the median - less than half the Australian level. Even a short-hours part-time job in Australia would be more effective at reducing poverty than in any other country - see Tables 11 and 12 in the paper.
As a result I think that findings drawn from the US are not particularly relevant to Australia, since the extent of in-work financial support is so much higher in Australia.
Having said this, many families may need considerable support to help stay in the labour market and part-time jobs may be more realistic than full-time jobs.
This is a completely different issue from whether payments should be made in cash or as food vouchers.
I would interpret the selection argument - which is very strong - somewhat differently. In this context, I find this article extremely interesting although it is about divorce (and based on French data)
http://ideas.repec.org/p/cpr/ceprdp/4146.html
His summary is as follows: “For given observable parental characteristics, children with divorced or separated parents tend to perform less well at school than children living with their two parents. This result has been used to argue that softening divorce legislation might be bad for children. This might, however, just reflect a selection effect: parents who decide to separate are presumably parents who fight with each other, etc., and it is unclear whether children growing up in a high-conflict, two-parent family are better off than children with separated parents. In this Paper, I develop two identification strategies suggesting that the selection hypothesis is indeed relevant. First, [using longitudinal data] I look at the school performance of children a couple of years before their parents separate, and I show that they are doing as bad as children already living with only one of their parents…”
The obvious interpretation of this is that it is not necessarily divorce or lone parenthood that is bad for children, but that the negative outcomes and divorce itself are consequences of something else that is bad for children’s educational outcomes. This however could lead to arguments for even earlier interventions.
This govt does not really care about the outcomes. It will be “seen to be Doing Something”, and the election will come along while the process is stil being ramped up, so whether it works or not won’t be apparent until later.
Peter’s comment highlights the importance of remembering that we are most definitely not the US, when seeking to generalise research results from the US to the Australian experience.
Peter highlights one key difference between us and them - our system of income transfers for low-income families is a hell of a lot more generous than anything that exists in the US. The second is that welfare reform in the US involved pushing single parents into low-paid full-time jobs, whereas in Australia we merely expect parents whose children are all at school to work 16 hours a week. I’ve always found it a bit hard to understand how working 16 hours a week (compared with the children’s 30 hours or so at school) is likely to be detrimental to the amount of time a parent can spend with their children. It is what the majority of mothers in Australia do, after all.
On Chris’s question about whether it might not be better to wait until children are a bit older, under the previous parenting payment eligibility criteria you didn’t have to look for work until your youngest child was aged 16 - I don’t think staying out of the workforce for 20 years or more (assuming more than one child) could possibly do anything to improve a person’s chances of getting a job. Even under the current rules, a parent with two or more kids could easily be out of the workforce for 10 years or longer.