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Economic Growth and Income Support Policy in Australia

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  • J. P. COX

Abstract

This paper examines the growth in welfare spending in Australia over the 20 years from the early 1960s to the early 1980s. Particularly for pensioners and beneficiaries with children, the levels of benefit and high tax rates implicit in the tax and social security systems are shown to create disincentives over wide ranges of private income. A careful examination of the evidence indicates that more generous levels of benefits had a modest but significant part in the growth of unemployment since 1970. The paper concludes by suggesting that the efficiency costs of meeting society's distributional objectives can be minimized by targeting assistance to the most needy and by the careful use of income testing.

Suggested Citation

  • J. P. Cox, 1986. "Economic Growth and Income Support Policy in Australia," The Economic Record, The Economic Society of Australia, vol. 62(3), pages 268-285, September.
    • Handle: RePEc:bla:ecorec:v:62:y:1986:i:3:p:268-285
    DOI: 10.1111/j.1475-4932.1986.tb02687.x
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    References listed on IDEAS

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    1. Atkinson, A. B. & Gomulka, J. & Micklewright, J. & Rau, N., 1984. "Unemployment benefit, duration and incentives in Britain : How robust is the evidence?," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 3-26.
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    3. repec:bla:ecorec:v:59:y:1983:i:166:p:260-70 is not listed on IDEAS
    4. W. J. Merrilees, 1983. "Pension Benefits and the Decline in Elderly Male Labour Force Participation," The Economic Record, The Economic Society of Australia, vol. 59(3), pages 260-270, September.
    5. Maki, Dennis R & Spindler, Zane A, 1975. "The Effect of Unemployment Compensation on the Rate of Unemployment in Great Britain," Oxford Economic Papers, Oxford University Press, vol. 27(3), pages 440-454, November.
    6. Benjamin, Daniel K & Kochin, Levis A, 1979. "Searching for an Explanation of Unemployment in Interwar Britain," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 441-478, June.
    7. Minford, Patrick, 1983. "Labour Market Equilibrium in an Open Economy," Oxford Economic Papers, Oxford University Press, vol. 35(0), pages 207-244, Supplemen.
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