Non-Technical Summary:
Growing up in welfare dependency limits the opportunities of children to participate as full members of society, is economically inefficiently by wasting human resources, reduces people’s trust in social and political institutions, and undermines social cohesion.
The expansion of human capability commences in childhood. Children growing up in welfare-dependent homes face challenges that restrict their ability to improve their ‘capabilities’ and prevent them from moving out of a state of disadvantage. The human capability framework aims at identifying key points along the life course where interventions are most effective at preventing disadvantage from taking hold. Pre-emptive spending early in the life course can reduce future burden on the income support system.
Our review of the literature reveals that empirical analyses in Australia are scarce and methodologically limited – chiefly due to the scarcity and shortcomings of available data sources. Consequently, they are of limited value to inform evidence-based policy. What is available, suggests that the likelihood of intergenerational transmission of disadvantage due to parental welfare dependency is exacerbated by certain attitudes to work and welfare, lack of educational attachment, youth unemployment, Indigenous status, geographic location, and parental mental health issues. Supportive parental relationships and early educational interventions act as protective factors. Relative to young people from families who have not used income support, young people from families who have used income support are more likely to receive income support as adults, adopt permissive views on income support dependency, fail to perform at primary, complete secondary and enter tertiary education, experience unemployment, become teenage parents, suffer from physical and mental health problems, and engage with the criminal system.
Maturing Australian longitudinal studies, along with advances in data integration methods, now offer prospects for addressing the dearth of appropriately powered studies capable of illuminating the pathways in and out of intergenerational disadvantage. The collection of new fit-for-purpose longitudinal data and the integration of administrative Government datasets should also be considered.