The Effect of Quarantining Welfare on School Attendance in Indigenous Communities

57 Pages Posted: 14 May 2018

See all articles by Deborah A. Cobb-Clark

Deborah A. Cobb-Clark

School of Economics, University of Sydney; IZA Institute of Labor Economics

Nathan Kettlewell

University of Sydney

Stefanie Schurer

Victoria University of Wellington - School of Economics and Finance

Sven Silburn

The University of Sydney - Menzies Centre for Health Policy

Abstract

We analyze the impact of a recent initiative by the Australian Government to reduce disadvantage and improve children's welfare in Aboriginal communities. The policy – known as income management – quarantines 50 percent of welfare payments to be spent on priority goods (e.g., food, housing, education) and not on socially harmful goods (drugs, pornography, gambling). Our focus is on children's school attendance, which is a precise, high-frequency measure of community functionality and a key policy objective. We identify the causal impact of income management on attendance rates by exploiting exogenous variation in its staggered rollout across communities. We find no evidence that income management increased attendance.Rather, the introduction of income management reduced attendance by 2.7 percentage points (4 percent) on average in the first five months after which attendance eventually returned to its initial level. The attendance penalty is similar for boys and girls, but is larger for secondary school students and students with a tendency to attend school regularly. Exploring the potential mechanisms, we show that income management did not significantly affect student enrollments or mobility patterns into and out of Aboriginal communities. Nor are our results explained by confoundedness with other policy initiatives. Instead, we find that the attendance penalty associated with the introduction of income management is virtually zero after the adoption of more exible administrative arrangements suggesting that implementation issues may be responsible for the temporary reduction in school attendance that we observe.

Keywords: income management, in-kind transfers, policy evaluation, Indigenous disadvantage, welfare quarantining

JEL Classification: D04, I28, I38

Suggested Citation

Cobb-Clark, Deborah A. and Kettlewell, Nathan and Schurer, Stefanie and Silburn, Sven, The Effect of Quarantining Welfare on School Attendance in Indigenous Communities. IZA Discussion Paper No. 11514. Available at SSRN: https://ssrn.com/abstract=3177391

Deborah A. Cobb-Clark (Contact Author)

School of Economics, University of Sydney ( email )

606 Social Sciences Bldg. (A02)
The University of Sydney
Sydney, NSW 2006
Australia
61435061387 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Nathan Kettlewell

University of Sydney ( email )

Rm 370 Merewether (H04)
Sydney, NSW 2006 2008
Australia

HOME PAGE: http://sydney.edu.au/arts/economics/staff/profiles/nathan.kettlewell.php

Stefanie Schurer

Victoria University of Wellington - School of Economics and Finance ( email )

P.O. Box 600
Wellington 6001
New Zealand
+64-4-4636708 (Phone)

HOME PAGE: http://www.victoria.ac.nz/sef/staff/stefanie-schurer.aspx

Sven Silburn

The University of Sydney - Menzies Centre for Health Policy ( email )

Sydney, 2006
Australia

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