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Intergenerational Welfare Participation in New Zealand

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  • Tim Maloney
  • Sholeh Maani
  • Gail Pacheco

Abstract

New Zealand panel data, which provide extensive information on the benefit histories of parents and their children, are used to estimate an intergenerational correlation coefficient in social welfare dependency. Recent estimation techniques for addressing issues of measurement error are applied to this analysis. The long‐term benefit histories of parents and instrumental variable techniques provide useful lower and upper‐bound estimates of the true intergenerational correlation. Our results suggest that the true correlation coefficient between the welfare participation of parents and their offspring is somewhere between one‐third and two‐thirds, but probably much closer to the lower limit in this range. Approximately one‐quarter of this effect appears to operate through the lower educational attainment of children reared in families receiving social welfare benefits.

Suggested Citation

  • Tim Maloney & Sholeh Maani & Gail Pacheco, 2003. "Intergenerational Welfare Participation in New Zealand," Australian Economic Papers, Wiley Blackwell, vol. 42(3), pages 346-362, September.
    • Handle: RePEc:bla:ausecp:v:42:y:2003:i:3:p:346-362
    DOI: 10.1111/1467-8454.00203
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    References listed on IDEAS

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    1. Levine, Phillip B. & Zimmerman, David J., 2005. "Children's welfare exposure and subsequent development," Journal of Public Economics, Elsevier, vol. 89(1), pages 31-56, January.
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    2. Nicolas Hérault & Guyonne Kalb, 2016. "Intergenerational correlation of labor market outcomes," Review of Economics of the Household, Springer, vol. 14(1), pages 231-249, March.
    3. Edmark, Karin & Hanspers, Kajsa, 2011. "Is welfare dependency inherited? Estimating the causal welfare transmission effects using Swedish sibling data," Working Paper Series 2011:25, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.

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