Wednesday, 24 March 2010

DPB and work requirements

I haven't had the time to look in any depth at National's proposed changes to the welfare system. In general I favour work requirements and I favour low abatement rates to keep effective marginal tax rates low.

But I do wonder if anybody's keeping stats on birth spacing. If mothers on the Domestic Purposes Benefit are going to be subject to work requirements when their youngest child turns 6, that provides a reasonable incentive to have another child when your youngest is 5. It would be interesting to see whether there are any suspicious spikes in likelihood of having another child at that interval conditional on being a DPB recipient. We do know that folks are suspiciously likely to find work in the week in which their unemployment benefit would otherwise run out.

Lindsay Mitchell keeps far better track of these things than I do; she's also worried about the elasticity of childbirth to benefit timing.

Oh, for a world of lump sum transfers....

Given that Susan returned to work 3 months after Ira's arrival, and will return to work 3 months after our forthcoming daughter's arrival, at least partially because of excessive taxes on my income to provide transfers to mothers who wish not to return to work and are happy to live with their children in relative penury, I'm somewhat unsympathetic to DPB recipient concerns about having to put their children in childcare. I'd even sometimes be inclined to call it an abomination that we find ourselves required to be a two income household in order to fund the lifestyle choices of those who prefer to be a no income household. But that would be stepping from dispassionate economic analysis into areas where I've little comparative advantage.

No comments:

Post a comment