Did the 2007 Welfare Reforms for Low Income Parents in Australia Increase Welfare Exits?

Melbourne Institute Working Paper No. 01/12

Date: January 2012


Yin King Fok
Duncan McVicar


This paper examines the impacts of recent Australian welfare to work reforms for low income parents of school-aged children who had been in receipt of Parenting Payment for at least one year. Specifically, the reforms introduced a requirement to engage in at least 15 hours of work-related activity per week from the youngest child’s seventh birthday. We find large positive impacts on the hazard rates for exiting welfare and for switching between welfare payments. As a consequence, over the first year of the new regime the Parenting Payment caseload for the parents in this cohort with a youngest child aged 6 at the start of the year fell by 23.5%; without activation we estimate it would have fallen by 18.5%. The reforms also offer a rare opportunity to compare impacts on single and partnered parents, with partnered parents shown to be more responsive.

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