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Intergenerational Disadvantage: Learning about Equal Opportunity from Social Assistance Receipt

Author

Listed:
  • Deborah A. Cobb-Clark

    (School of Economics, The University of Sydney, ARC Centre of Excellence for Children and Families over the Life Course, and IZA Institute of Labor Economics)

  • Sarah C. Dahmann

    (School of Economics, The University of Sydney, and ARC Centre of Excellence for Children and Families over the Life Course)

  • Nicolás Salamanca

    (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne, ARC Centre of Excellence for Children and Families over the Life Course, and IZA Institute of Labor Economics)

  • Anna Zhu

    (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne, ARC Centre of Excellence for Children and Families over the Life Course, and IZA Institute of Labor Economics)

Abstract
We use variation in the extent of generational persistence across social assistance payments to shed light on the factors leading to intergenerational disadvantage. Our administrative data come from the Australian social security system and provide us with detailed social assistance trajectories – across the entire social safety net – for a birth cohort of young people and their families over an 18-year period. We find that young people are 1.8 times more likely to need social assistance if their parents have a history of receiving social assistance themselves. These young people also receive more intensive support; an additional $12,000 over an 8-year period. The intergenerational correlation is particularly strong in the case of disability payments, payments for those with caring responsibilities, and parenting payments for single parents. Disadvantage stemming from parents’ poor labor market outcomes seems to be easier for young people to overcome. This suggests that parental disadvantage may be more harmful to children’s later life outcomes if it is more strongly driven by circumstances rather than personal choice.

Suggested Citation

  • Deborah A. Cobb-Clark & Sarah C. Dahmann & Nicolás Salamanca & Anna Zhu, 2017. "Intergenerational Disadvantage: Learning about Equal Opportunity from Social Assistance Receipt," Melbourne Institute Working Paper Series wp2017n28, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2017n28
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    2. Bubonya, Melisa & Cobb-Clark, Deborah A., 2021. "Pathways of Disadvantage: Unpacking the Intergenerational Correlation in Welfare," Economics of Education Review, Elsevier, vol. 80(C).
    3. Irma Mooi‐Reci, 2020. "Intergenerational Mobility Research: Current Challenges and Future Directions," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 53(2), pages 241-246, June.
    4. Benjamin Heslop & Antony Drew & Elizabeth Stojanovski & Kylie Bailey & Jonathan Paul, 2018. "Collaboration Vouchers: A Policy to Increase Population Wellbeing," Societies, MDPI, vol. 8(2), pages 1-19, June.
    5. Christina M. Pollard & Sue Booth & Jonathan Louth & Catherine Mackenzie & Ian Goodwin‐Smith, 2020. "“I'd be sleeping in the park, I reckon”: Lived Experience of Using Financial Counselling Services in South Australia," Economic Papers, The Economic Society of Australia, vol. 39(4), pages 353-366, December.
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    8. Rafael Carranza, 2020. "Inequality of Outcomes, Inequality of Opportunity, and Economic Growth," Working Papers 534, ECINEQ, Society for the Study of Economic Inequality.

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    More about this item

    Keywords

    Intergenerational correlations; socioeconomic disadvantage; social assistance;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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