The Social Policy Evaluation, Analysis, and Research Centre

Centre Description

The SPEAR Centre commenced in 2000 as a joint initiative between the Australian Government Department of Family and Community Services (FaCS), now the Department of Families, Community Services and Indigenous Affairs (FaCSIA) and the Economics Group in the Research School of Social Sciences at the ANU. The Centre’s initial social policy research agreement with FaCS concluded at the end of 2004, but was renewed with increased funding for a second five-year Social Policy Research Services Agreement, covering the period 2005-2009. The Centre's focus remains on ensuring that social policy evaluation in Australia derives maximum benefit from the latest international developments.

During the term of the first SPEAR Centre contract, staff and affiliates were very active in introducing modern program evaluation techniques into the broader Australian research community. Their commitment to the development and expansion of Australia’s capacity to undertake program evaluation resulted in an active training program that promoted a firm understanding of current methods of program evaluation among interested policy makers and academics. SPEAR Centre courses included:

• Evaluation of Public Programs (Christoph Schmidt);
• Panel Data (Robert Breunig)
• Duration Analysis (Paul Frijters)
• Econometric Methods of Program Evaluation (Jeff Smith) and
• Panel Data and HILDA User Training (Robert Breunig and Nicole Watson).

Centre members maintain strong links with government departments, as well as with other organisations and academics engaged in social policy evaluation.

Future plans for The SPEAR Centre include:

• continuing its research into social policy issues under the terms of the agreement with FaCSIA
• proceeding with its collaboration with FaCSIA on ARC linkage grants for research on intergenerational welfare receipt and parents on low incomes;
• continuing to provide appropriate training courses;
• hosting secondments of FaCSIA staff to the SPEAR Centre to participate in joint research projects and
• facilitating the sponsorship of PhD training.

Research into Social Policy Issues – Agenda 2008

The SPEAR Centre Research Agenda for 2008 includes projects on the following topics:

Project 1: Estimating future wealth of cohorts approaching retirement
The research will address the following questions:

• What will be the wealth at retirement of cohorts of people who have not yet reached retirement age?
• Will they have sufficient superannuation and other assets to fund their retirement?
• What proportion will have to rely on full government aged pensions in retirement?
• How do education, current labour force activity and demographic factors such as marital status affect these estimates?

• How do the estimates vary by gender and how might patterns of marital breakdown and labour force participation affect the wealth estimates for middle aged women, in particular?

By providing improved evidence about the nature of asset accumulation over people’s lives, the research will be informative about the future path of Commonwealth pension expenditure if current patterns of asset accumulation persist and for the development of policies that provide income in retirement for groups who may face particular problems in retirement. The purpose of the project will not be to forecast future aged pension expenditure (available government reports do this), but to identify groups whose asset holdings on retirement might be particularly low.

Project 2: Asset Portfolios of Australian Retirees
The research will analyse the following questions:

• First, how do the portfolio choices of pre- and post-retirement household differ?

• Second, are these differences consistent with households managing their wealth in a way that maximises access to the Age Pension?

Economists are increasingly using detailed comparative studies of wealth levels across different groups as a way of gaining a deeper understanding of process through which households accumulate and manage their wealth. Given that eligibility for the Age Pension is asset tested, there is a particular interest among policy makers in understanding how households allocate their wealth across asset types in the lead up to retirement.

Project 3: Young Australians and social inclusion
This research seeks to address the relationships between parental and family characteristics, including a history of dependence on income support, on a number of important indicators of social inclusion among young adults: specifically educational attainment, employment rates, health outcomes; participation on community organizations; and the experience of early fertility.
Social exclusion is the result of many aspects of disadvantage, such as unemployment, low incomes, poor health and disability, crime, and family breakdown. In combination, these problems can result in cycles of poverty that is transferred across social groups and from one generation to the next.
There are only a handful of Australian studies that try to quantify the various disadvantage factors and little is known about complex relationships between different factors and outcomes. This study seeks to identify the social and economic disadvantages faced by youth from income-support-dependent families and the “risk” and “protective” factors that can contribute to these poor outcomes.
We will examine aspects of social inclusion at the extremely important stage of early adulthood when young people are moving between education sectors, entering the labour market, starting families, and generally establishing themselves as independent adults. Developing a fuller understanding of factors contributing to the disadvantage and of the reasons why disadvantaged youth succeed – or fail to succeed – is a necessary first step in formulating sensible policies targeted towards breaking any poverty or social exclusion cycle among the Australian youth.

Project 4: Childhood family circumstances and young adult people's receipt of income support
This research project will study how a young adult person's receipt of income support from the government is related to his or her family circumstances while growing up. In particular, the research will examine the effect of financial disadvantage and the family's receipt of income support.
On the one hand, government income support helps families overcome temporary setbacks and permanent disadvantage and income support may therefore contribute to helping young people from disadvantaged backgrounds gain independence and self-reliance. On the other hand, the argument is often heard that income support promotes a “culture of welfare dependency” by reducing any stigma attached to receiving income support and by “teaching” recipients how to “play the system”.
The research will shed light on the effects of parents’ reliance on income support on their children’s receipt of income support as young adults. In particular, the research will examine how the relationship between other childhood family circumstances and the outcomes of young adults are affected by the parents’ receipt of income support. Due to lack of data, apart from anecdotal evidence, little is known about this in Australia. The outcomes of this research can be used to inform future policies

Project 5: Disabled children’s Well-Being and Parental Workforce Participation
This research will address the following questions:

• How is having a child with problems such as physical disabilities and mental health condition associated with the social exclusion of the other household members?
• Particularly, are parents who have a child with such problems less likely to participate in the workforce and attain lower household earnings

Families with young children who have disabilities and mental health conditions are likely to bear extra caring duties on top of regular child-rearing responsibilities. These families are not a negligible proportion of the population. The incidence of disability is 4% for 0-4 year-olds and 12% (8%) for 5-14 boys (girls)(The Australian Bureau of Statistics, 2003). One of the major mental health conditions, Attention Deficit / Hyperactivity Disorder (ADHD) is estimated to be found among 2-6% of Australian children (The Government of Western Australia, 2002).
These problems can increase the hours during which the parents need to care for them, thereby limiting the parents’ choice to participate in the workforce. Such a risk of social exclusion for carers has been recently stressed by the current Government prior top its election (The Australian Labor Party, 2007). The financial and psychological benefits of paid employment for carers have been recognized as well (The Commonwealth of Australia, 2007). In this context, the Government has been providing assistance to carers who look after a child or an adult with a severe disability or medical condition through, for example, Carers Allowance. Nevertheless, relatively little is known about the extent to which children’s disability and mental health conditions are associated with parental employment status, earnings, and the receipt of public assistance. Furthering our understanding of this relationship is likely to contribute to the discussion of public policies that aim to assist carers.

Project 6: Mobility patterns and characteristics – highly disadvantaged communities
This research will address the following questions:

• Are mobility rates into and out of highly disadvantaged communities greater than in other areas?
• Do the socio-economic characteristics of those who move into and out of highly disadvantaged communities differ from the average for that community?
• Is it possible that the people who benefit from government programs and overcome disadvantage move out of the area?
• Is the community level of disadvantage steady because people moving into the area are as, or more, disadvantaged?
• Is the level of mobility insignificant?

Over recent years, there has been an increasing recognition of the need for place-focussed and integrated policy initiatives to assist in tacking the problems of entrenched locational disadvantage. Research has shown that location has a strong influence on an individual’s outcomes in life.
Analysis shows us that there are 148 suburbs (the top 1% of suburbs ranked using ABS SEIFA Index of Disadvantage) across Australia experiencing long term entrenched disadvantage at high levels, notwithstanding current investments by government, but little is known about mobility into and out of these areas.

Project 9*:Economic incentives, social norms and behaviour
This project will examine the economic and psychological literature in relation to behavioural change for individuals in receipt of government income support. It will address the following questions:

• How do individuals, particularly those in receipt of government income support, change their behaviour when faced with new incentives (both positive and negative)?
• How is this behavioural change mitigated or reinforced by societal norms?
• How amenable to change are societal norms and can their change lead to behavioural change?

This proposal involves addressing these questions through a review of relevant literature in economics and psychology.

*In 2008, SPEAR will deliver two courses to FaHCSIA Staff: Economics for Social Policy Analysts and Empirical Analysis by Economists. These have been designated projects 7 & 8.

Grants

ARC Linkage Grant

The Intergenerational Transmission of Dependence on Income Support: Patterns, Causation and Implications for Australian Social Policy Research is a 5-year ARC Linkage Grants-funded project in which the ANU is working with the Australian Government Department of Family and Community Services. The researchers on this project are Dr Deborah Cobb-Clark, Dr Robert Breunig, Dr Tue Gørgens of the Australian National University, Professor Jeff Borland of the University of Melbourne, and Professors Robert Haveman and Barbara Wolfe of The University of Wisconsin. The aim of this project is to examine the consequences of growing up in an income-support family. The first stage will describe the relationship between parents’ and children’s income-support receipt to determine whether these children are more likely to access income-support programs themselves. Stage 2 will identify the causal mechanisms through which parental income-support receipt influences children’s outcomes. Identification of these transmission mechanisms is a necessary first step in formulating policies targeted towards breaking any cycle of welfare dependence. This project is innovative in its use of survey data merged to unique administrative data that link the income-support records of some 53,000 young Australians and their parents . A pilot for the study, which will involve surveying approximately 2,000 Australian youths and parents, is scheduled for mid-2005.

Staff

Senior Fellow and Director
Chris Ryan. MEc (ANU), BCom, PhD ( Melbourne)
 
Research Staff
J.Z. (Elliott) Fan, BA ( National Taiwan University), MA, PhD ( University of Toronto)
Tue Gørgens, Cand. Oecon (Aarhus) PhD ( Iowa)
Anastasia Sartbayeva, MEc (ANU), PhD (ANU)
Chikako Yamauchi, BA, MA ( University of Tsukuba) CPhil, PhD (UCLA)
Mathias Sinning, BA, MA (University of Heidelberg) PhD (University of Bochum)

Students
Juan Baron, B.Ec. ( Columbia), M.Ec. (ANU)
Topic : Essays in Applied Microeconomics
Michelle Tan, B.Bus (RMIT), GradDipIntDevEc, MintDevEc (ANU)
Topic: The Economic Consequences of Marital Breakdown

Project Manager
Sean Downes
 
Other contributors to the 2008 Research Program
Deborah Cobb-Clark, BA MA (Mich.State) PhD ( Mich)
Vincent Hildebrand, Maîtrise (Paris-Dauphine), MA, PhD (York)
Stephen Whelan, BCom/LLB (NSW), MAgEc (Sydney), PhD (UBC)

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