Families pass on disadvantage, finds world-first welfare analysis

Almost two decades of Australian welfare payment data paints a picture of disadvantage, as researchers find children of parents on benefits are almost twice as likely to receive benefits too by their early 20s.    

An extensive study of welfare payments to more than 100,000 Australians has provided comprehensive evidence that young people are almost twice as likely to receive welfare by their early 20s, if their parents have also received benefits.

Granted access to 126 million payment records covering an 18-year-period, researchers from the University of Sydney and University of Melbourne also confirmed that these young people also receive more intensive welfare support, amounting to an additional $12,000 over an eight-year period.

The researchers examined Centrelink payments to Australians born in 1987 and 1988 when these young people were between the ages of 18 and 26, to understand how disadvantage occurs across generations.

The analysis highlights the extent to which an Australian’s life circumstances can affect their child’s, with the researchers pinpointing "particularly strong" flows of disadvantage from people receiving disability, carer, and single parent payments.  

"Our results deliver compelling evidence that social and economic disadvantage is being passed from parents to their children," said  Professor Deborah Cobb-Clark , of the University of Sydney’s  School of Economics.

"While we make it very clear that welfare payments do not beget welfare payments, we show a clear relationship between parental disadvantage and the effects of a person’s life circumstances, over personal choices, in driving that disadvantage.

"Our research shows the playing field is clearly not level for all Australians. Policymakers must make concerted efforts to even out the chances of children growing up in vulnerable families," said Professor Cobb-Clark.

The findings have been  published as a working paper  by the Australian Research Centre of Excellence for Children and Families over the Life Course.

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