A new paper that explores the reasons why the children of welfare recipients are more likely to require welfare support themselves has revealed that not completing high school is the primary reason.
The research also provides a more evidence-based understanding of intergenerational welfare, whereby one’s dependence on welfare is often perceived as being symptomatic of a family’s welfare history and their attendant attitudes towards work and welfare.
Professor Deborah Cobb-Clark and Melisa Bubonya at the University of Sydney conducted the study – published in The Economics of Education Review journal – utilising welfare data of the participants and their parents between 1996 and 2013 as well as data provided by the 2006 Youth in Focus Project.
After rigorous analysis, the researchers found that children of parents who are welfare dependent face a trio of challenges that lowers their prospects of graduating from high school. These include “a lack of financial support as well as frequent changes of home and school”. A vicious cycle then begins as the children’s incomplete education makes them more likely to require welfare in their adult years.
Another salient point uncovered by the research was that adults aged 23 to 26 “are twice as likely to receive welfare if their parents have”.
“The single most important mechanism linking welfare across generations is the failure to complete high school,” Cobb-Clark said.
The study also revealed that “students whose families receive welfare are 55% less likely to finish high school than their classmates whose families do not”, highlighting the clear link between education completion and socioeconomic status. Such children’s poor prospects are then compounded by the fact they cannot attain an ATAR score and attend university, increasing the likelihood they will become welfare-reliant in the future.
“Early school experiences can have long-term consequences,” the University of Sydney researchers say.
“Young people in welfare-reliant households are more likely to drop out of high school – and thus end up on the welfare rolls – in part because of disciplinary actions that disproportionately result in their suspension and expulsion from school.
“In short, disruptions in adolescents’ schooling play a part in linking welfare reliance across generations.”
Another pertinent aspect of the study was that completing high school “played a much larger role in the transmission of welfare than how well students performed”.
“Educational achievement only has a small effect on whether the need for welfare will pass down to another generation, especially when compared to the effect of high school dropout,” the researchers assert.
The new study is critical in that it dispels unhelpful and spurious ideas about those receiving welfare support and their reasons for needing to. For instance, Bubonya and Cobb-Clark found that intergenerational welfare is not the result of uncaring, aloof parenting, and nor is it the result of the “children's attitudes towards work and welfare”, which some believe are transmitted by welfare-dependent parents.
“Attitudes towards work and welfare only had a modest effect. This is at odds with cultural explanations of intergenerational welfare which blame welfare dependency on the values children acquire from their parents and neighbours,” the researchers contend.
To address intergenerational welfare, the researchers believe policy must focus on alleviating the kinds of family financial stress that lead to children dropping out of school early.
“The level of financial support parents can provide plays an important role in transmitting disadvantage across generations. This calls into question the wisdom of Australian policies that shift the financial burden of supporting young people from the public purse to their families,” they state.
“Such policies are likely to increase the role of parents’ living situation and finances in passing on welfare reliance to the next generation.”
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