Policy versus economic impacts: The economic position of Australian single parents post the GFC

Workforce issues
Thursday 26 July, 1200 – 1220


Professor Matthew Gray
Australian National University

There have been significant changes to the Australian social security system in the 2000s, particularly for single parents. These have included restricting eligibility to the more generous Parenting Payment Single to those with children below 8 years of age; shifting others onto the significantly less generous unemployment benefit (Newstart); and the introduction and enforcement of stricter activity testing. The evidence is that the numbers of Parenting Payment Single recipients have reduced dramatically (although there have been some recent increases) and employment rates of single parents after initially increasing have fallen, post the 2008 financial crisis.

This paper uses PolicyMod, a new Australian tax-transfer microsimulation model to provide insights into the relative impacts of social security policy changes and changes in the macro-economy and labour market in explaining changes in single parents’ patterns of benefit receipt, employment rates, hours of work and income. The approach used is to conduct a series of simulations which hold constant labour market participation and earnings of single parents (using observed outcomes at the individual level from the 2004 Survey of Income and Housing and the 2014 Survey of Income and Housing) and vary social security policy settings between the pre-2006 policy changes and the 2014 policy settings. This allows us to decompose the impacts of social security and broader economic and social changes.

The results of the microsimulation modelling will be compared to analysis of actual outcomes for single parent families modelling using longitudinal survey data from the Household, Income and Labour Dynamics in Australia Survey.