Reducing the Generosity and Increasing the Conditionality of Disability Benefits: Turning the Supertanker or Squeezing the Balloon?

Barbara Broadway and Duncan McVicar

No 15-02, Economics Working Papers from Queen's Management School, Queen's University Belfast

Abstract: This paper examines the impact of a major Australian disability reform – the 2006 Welfare to Work reform – on welfare receipt. It uses a combination of difference-in-differences and propensity score matching to identify the treatment effect. The reform reduced the generosity and increased the conditionality of welfare payments by shifting partially disabled disability benefit claimants from disability benefits to unemployment benefits. This led to increases among partially disabled welfare recipients in the hazards for exiting welfare and for switching (back) from unemployment to disability benefits. It also led to an increase in the hazard for returning to welfare for those having previously exited welfare. Overall the reform had no impact on the probability of being on welfare 12 months or 24 months later. Disability reforms need to do more than simply reduce the generosity and tighten the conditionality of payments if they are to impact on welfare dependence among people with disability.

Keywords: Welfare reform; Disability; Hazard rate; Propensity score matching; Difference-in-differences (search for similar items in EconPapers)
JEL-codes: I38 J14 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2015-05
New Economics Papers: this item is included in nep-agr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Reducing the Generosity and Increasing the Conditionality of Disability Benefits: Turning the Supertanker or Squeezing the Balloon? (2015)
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