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

Mary-Alice Doyle, Stefanie Schurer and Sven Silburn ()
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Mary-Alice Doyle: London School of Economics
Sven Silburn: Menzies School of Health Research

No 13543, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: income management; birth outcomes; Aboriginal children; welfare reform; unintended consequences (search for similar items in EconPapers)
JEL-codes: D04 I14 I38 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2020-07
New Economics Papers: this item is included in nep-hea
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Published - updated version published in: Journal of Health Economics, 2022, 84, 102618

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