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

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.