Explaining Welfare to Work Transitions Among the Unemployed

Abstract

This paper uses data from the General Customer Survey (GCS) to examine patterns of movement off the benefit system among recipients of Newstart Allowance and Parenting Payment. The analysis covers the first three waves of the GCS, which commenced in March 2000 and follows recipients after they left the welfare system. Survey participants are separated into welfare system 'Stayers' and 'Leavers' and the characteristics of these two groups are examined in an attempt to identify the factors that differ between them. The analysis suggests that a number of personal attributes are important, including age, gender, the presence of young children and benefit duration. These are supplemented by other variables, including the level of earnings at Wave I, use of the internet to find work, housing costs, non-housing debt and assessment of location. Some support is also found for the role of participation in an Activity Agreement, although the impact of this variable is compounded with that of age. There is also some weak support for the stepping stone hypothesis, in that participation in study or volunteer work are both positively associated with subsequent movement off the welfare system.