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The Henderson Question? The Melbourne Institute and fifty years of welfare policy

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  • R. G. Gregory

Abstract

We discuss selected research contributions of the Melbourne Institute of Applied Economics and Social Research, to fifty years of welfare policy for those of work force age and focus particularly on the policy focus of R. F. Henderson, the inaugural director. Following the spirit of his 1960s poverty research, government, in the mid-1970s, doubled unemployment allowances in real terms and increased pensions by approximately forty per cent. Both income support payments were to be indexed by average wage increases. At the time, unemployment was typically around one per cent and the pension take-up was also limited. Today, income support take-up rates have probably increased five-fold. In response, government has adopted a “make work pay’ policy over the last two decades and indexed allowances for CPI increases and allowances have fallen 25-35 per cent, relative to community living standards. We address a range of questions arising from this experience including, Why has government abandoned the Henderson recommendations? Is there any evidence that a “make work pay” policy is working?

Suggested Citation

  • R. G. Gregory, 2013. "The Henderson Question? The Melbourne Institute and fifty years of welfare policy," CEPR Discussion Papers 682, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    • Handle: RePEc:auu:dpaper:682
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    File URL: https://www.cbe.anu.edu.au/researchpapers/CEPR/DP682.pdf
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    1. Linda L. Richardson, 2002. "Impact of the Mutual Obligation Initiative on the Exit Behaviour of Unemployment Benefit Recipients: The Threat of Additional Activities," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 406-421, December.
    2. Yin Fok & Duncan McVicar, 2013. "Did the 2007 welfare reforms for low income parents in Australia increase welfare exits?," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
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    4. Disney, Richard & Webb, Steven, 1991. "Why Are There So Many Long Term Sick in Britain?," Economic Journal, Royal Economic Society, vol. 101(405), pages 252-262, March.
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    Cited by:

    1. Francisco Azpitarte, 2014. "Was Pro-Poor Economic Growth in Australia for the Income-Poor? And for the Multidimensionally-Poor?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(3), pages 871-905, July.
    2. Ross Williams, 2013. "Introduction," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(3), pages 325-326, September.
    3. Nicolas Herault & Francisco Azpitarte, 2014. "Recent Trends in Income Redistribution in Australia: Can Changes in the Tax-Transfer System Account for the Decline in Redistribution?," Melbourne Institute Working Paper Series wp2014n02, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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    Keywords

    make work pay; welfare policy; indexation of welfare payments;
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