Anna Zhu, RMIT University - The impact of restricting access to government cash assistance on the welfare receipt careers of newly-arrived migrants

Title: The impact of restricting access to government cash assistance on the welfare receipt careers of newly-arrived migrants

Abstract: Welfare policy is increasingly designed to promote self-sufficiency among newly-arrived migrant families. This paper studies how a reform denying low-income migrant families a government cash payment in the initial years of migration impacts on their employment and long-term welfare receipt behaviour. I apply a Regression Discontinuity Design using a reform that required migrants who arrived on or after 1 April 1996 to wait for two years before they could access welfare benefits, whereas migrants arriving earlier were required to only wait for six months. Using biweekly, administrative social security records, I find that the waiting-time reform reduced migrants' welfare receipt in both the short- and long-term. This result applies to migrants targeted by the reform as well as their partners. Using complementary survey data, I find that outcomes differed depending whether they arrived on the skilled or unskilled visa program. For the former, the waiting-time reform increased the chance they became employed, and subsequently raised their English proficiency and job quality. Alternatively, for those on the unskilled visa program, the reform is found to have had more mixed, gender-specific outcomes: it did not increase the likelihood that female migrants became employed, even though they searched more intensely for a job and lowered their reservation wage. Employment of migrant men did increase but not sufficiently to offset the loss in government-provided assistance, and overall the household consumption of low-skilled migrants declined. These results suggest that a more targeted withdrawal of welfare may have been appropriate.

Presenter: Anna Zhu, RMIT University

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