The effect of changing financial incentives on re-partnering

Workforce issues
Thursday 26 July, 1120 – 1140


Dr Hayley Fisher
University of Sydney

This paper examines how a reduction in the financial resources available to lone parents affects their speed of re-partnering. We study the 2006 Australian Welfare-to-Work reforms. These reforms reduced the financial resources available to a subset of separating parents and introduced participation requirements. Using biweekly administrative data capturing separations occurring among low- and middle-income couples, we show that the policy reform significantly increased the speed of re-partnering for affected separating mothers over the short and longer term.

The effects are strongest for Australian-born mothers and those with prior experience of income support receipt. Complementary analysis of an annual panel survey demonstrates that the quality of the additional relationships induced is no worse. Together, these results demonstrate that one way that lone mothers respond to a reduction in financial resources available at the time of relationship breakdown is by re-partnering more quickly.