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Program Manager: Dr Matthew Gray

This document updates the Institute's Research Plan 1999-2001 and presents the current Research Plan for the Family and Society Program. The plan covers the period 2001 to 2002 providing details of the ongoing work of the Families, Social Capital and Citizenship project and outlining two new areas of project work.

The first new stream of research explores issues to do with family friendly work practices. The second, explores transitions from welfare to work. Both of these themes involve a combination of theoretical and empirical research and will make important contributions to developing our understanding of the models of behaviour underlying the interaction between family life, the labour market and welfare.

1. Families, Social Capital and Citizenship
Project Manager: Wendy Stone

Summary and overview

There is now mounting international evidence that social relations of particular quality and nature are central to creating sustainable communities. Social relationships, which are characterised by high degrees of mutual trust and reciprocity are argued to sustain better outcomes in the economy, democracy and civil society. These sorts of social relationships are said to be laden with social capital — the norms and networks that enable people to act collectively.

Within the social capital literature it is generally assumed that the mere practice of family life will generate norms of trust and reciprocity but the actual circumstances under which this takes place are under researched. Community life has typically been the focus of social capital researchers. This work has pointed to the ‘decline of community’ (a long-standing theme in classical sociology) but has tended to assume that family life has been unchanging. Contemporary family sociology has identified that family practices are also changing rapidly. Massive demographic change has signalled dramatic changes in family-form with family-households now considerably smaller. This has important implications for the likely scale of kin-based networks. There is also evidence that the norms governing family life are undergoing change as well, from being primarily obligational to negotiated. Changes in the scale of kin-based networks and changes in the norms governing family life have considerable implications for social capital that as yet remain unexplored.

The research aims to inform the growing policy concern about the erosion of community networks and social civility. A social capital informed view of public policy advocates addressing how governments intervene in family and social life. Social capital friendly public policy avoids undermining existing networks and norms of trust and reciprocity, and designs programs to enhance social capital. This is the discourse informing policy discussions about building community strengths, which seek government interventions that build upon existing social capital to more effectively deliver services. The government’s lexicon for this approach refers to a ‘social coalition’ and ‘partnerships with business and the community’.

This policy approach is founded upon the assumption that social capital does indeed matter to a wide range of outcomes — an assumption that the Families, Social Capital and Citizenship project is designed to test. Specifically the FSAC project will test the importance of social capital to a range of economic, political and community engagement outcomes. The findings will also assess the importance of social capital in promoting self-reliance, for example, by revealing the importance of informal networks for finding employment or providing childcare.

Objectives

• How important is social capital to family engagement in the economy, polity and community?

• What family circumstances are most strongly and or weakly associated with social capital?

• What locality factors are most strongly and or weakly associated with social capital?

Other key objectives of the project are to identify:

• A set of indicators measuring social capital at the family and community levels.
• The spatial patterns of family engagement in economy, polity and community for families high and low in social capital.
• The processes and circumstances that lead to the transfer of social capital within the family to more extensive networks.
• Whether deficits of social capital within the family can be compensated for by social capital from networks beyond the family.
• Conclusions regarding the appropriateness of different kinds of government interventions in different kinds of family and community circumstances.

Research design

The main data for the project have been collected from a national random sample of 1500 households via telephone, being undertaken during December 2000 and early 2001. The survey has collected information about each respondent's activities within and beyond the household and within and beyond their locality.

The research design of the project is summarised in Table 1.

The survey instrument used in the project has required valid measures of the key aspects of social capital including networks, trust and reciprocity. The Australian Living Standards Study, Family Formation Surveys and the Australian Life Course Survey, all conducted by the Institute, provide examples of indicators of family and community networks. However, little work has been done previously on measuring trust and reciprocity in family and community networks. Most of the current literature on social capital at the family level is derived from surveys not designed for the purpose. The development of measures of social capital at the family and community level is therefore an original methodological contribution of the research.

Although the project provides many avenues for analysis, core themes of research to be undertaken with these data are:

• An empirical exercise to determine how the dimensions of social capital operate together empirically, as well as to see how these are distributed across families and communities in varied circumstances.

Following this, the project will use these findings to follow three substantive lines of research:

• Analysis of the role of social capital in facilitating family engagement in the labour market and economy.
• Analysis of the role of social capital in facilitating family participation in the community and civic life.
• Analysis of the role of social capital in facilitating family engagement in political life.

The work within the Families, Social Capital and Citizenship project has continued to focus upon (i) dissemination of survey findings, and (ii) contributing to policy dialogue and development around issues of community strength and community cohesion.

Following the presentation of the first data-based paper from the project at the National Social Policy Conference in July, this work is now being refined and developed for publication as the first Research Paper from the project. In addition, a paper exploring the links between family and community life has been accepted to the second annual Family Strengths Conference, jointly hosted by the University of Newcastle and the Department of Family and Community Services.

The interaction between work and family has long been of concern to policy makers and researchers. Initially this concern was driven by the substantial increase in the rate of female labour force participation. There are a large number of explanations for this increase including changes in societal attitudes towards married women participating in the labour force and accompanying legislation, technological change and changes in the nature of economic production.

These changes have ostensibly increased the choices regarding work and family that are available to women, including their capacity to make choices that are free from social disapproval and sanctions. However, with increased opportunity has come increased responsibility, women are still most often the primary caregivers and houseworkers as well as having additional responsibilities to an employer and workplace.

One of the consequences of these changes has been increased recognition of the importance of family friendly work practices in assisting parents to balance work and family responsibilities. This issue is highly relevant to current welfare reform debates, as the ability to find employment in a workplace with family friendly work practices may be a critical factor in determining the ability of parents and carers to increase their economic participation. Recognition of this is evident in the following quote from the McClure report:

While there is an extensive literature on the provision of family friendly work practices (see Russell and Bowman (2000) for a review), there are also issues of importance that have yet to be explored. The existing literature has analysed differences in the availability of family friendly work practices for different types of firms (for example industry, sector, workplace size, presence of union delegates) and between employees according to a range of personal characteristics (for example occupation, age, type of employment contract).

Issues relating to family friendly work practices that have yet to be explored include whether access to these work practices varies with level of education and occupation within workplaces as well as between workplaces. In addition to this, the literature typically focuses on family friendly work practices that enable workers to combine work and family in the present (for example paid leave to look after sick children and flexible working hours). It neglects the dynamic aspect of ‘family friendliness’ in that having children may impact upon prospects for career advancement, including future earnings and promotion.

TThe analyses for the project, Family-Friendly Work-Practices: Differences Within and Between Workplaces, has been completed and a paper is currently being prepared for publication. Work is progressing on another paper from this project titled 'How family friendly is permanent part-time work'.

This project will extend our understanding of the provision of family friendly work practices by using data from the Australian Workplace Industrial Relations Survey (AWIRS) a linked employee-employer data set. The AWIRS 1995 is a nationally representative survey of 2,001 workplaces with 20 or more employees, containing information from the general manager, the employee relations manager (for workplaces which have one) and employees. While the AWIRS data set is five years old the very large sample size combined with the linked employee-employer nature of the data make it a very powerful data set which is of continuing relevance.

The project will have four parts. The first will describe the pattern and availability of family friendly work practices by level of educational attainment, tenure, earnings, number and age of children of workers and other employee characteristics. This does not appear to have been done using large scale Australian Survey data.

As mentioned, the AWIRS is a linked employee-employer survey, which means that it is possible to link the responses of employees to those of the managers in the firm in which they work. In order to identify the differential effects of level of education and occupation on access to family friendly work practices within the same firm, the second part of this project will exploit the linked nature of the data by combining the responses of the managers with those of the firms’ employees.

The third part of the project will focus on the issue of career advancement by using information from AWIRS on the provision of employer provided training to employees with and without dependent children. If employees within a particular organisation report receiving employer provided training independent of the number and age of dependent children then this provides an indication that having children may have a minor impact upon career advancement.

Finally the project will analyse the chances of welfare recipients with children being able to find employment with family friendly work practices. This will be done comparing the characteristics of welfare recipients (with children) and the types of employment they find with the characteristics of employees who are able to access family friendly work practices. A possible source of information on the types of employment welfare recipients are finding is the Department of Family and Community Services Customer Survey.

By combining the responses of employee’s and employer’s about the availability of family friendly work practices this project will provide a fuller picture of the distribution and availability of family friendly work practices than is currently available.

One of the most dramatic changes to the Australian labour market in the past decade has been the increase in the number of families with children in which no adult is employed. This increase is in part due to the increase in the number of lone parent families and in part due to the increase in the number of couple families in which both parents are not employed (Gregory 1999; Newman 1999; Whiteford 2000b). The vast majority of these families receive welfare payments.

Australian children are being increasingly divided into those who live in families that are work rich (both adults employed) and those who live in families that are work poor (no adults employed) (see Miller 1997, Gregory 1993, 1999). Recent comparative studies find that while Australia has a relatively low overall level of joblessness among persons of working age, joblessness among families with children is among the highest in the OECD (Oxley et. al. 1999).

The increase of joblessness in families with children has led to concerns amongst policy makers, academic researchers and the general community on a number of fronts. First, there are concerns that living in a family in which no adult is employed may have adverse consequences on children in these families. These impacts may occur in a number of ways including:

• Lack of access to economic resources. This can have an impact on children’s physical and psychological development (medical treatment, nutrition);
• Long spells without employment and/or low levels of income often generate tension and conflict in families. For example, research demonstrates that long spells of adult unemployment and financial hardship can lead to domestic violence and divorce (Romans, Poore & Martin 2000; Najman et al 2000). This can have adverse consequences for children’s wellbeing and development;
• Long spells without employment and/or low levels of income may also lead to social exclusion. Research demonstrates that adult unemployment and precarious employment is positively correlated with poor quality neighbourhoods, weakened social ties and disengagement from civic and community life (Evans, Paugam and Prelis 1995). This clearly may also have adverse consequences for children’s wellbeing and development (Garbarino 1998);
• Long periods of parent joblessness may have consequences for children that extend well beyond the period of living in a family without work. Future employment chances may be adversely affected (McCoull and Pech 2000; Saunders and Stone 2000).

The increase of joblessness in families with children may also have spill-over effects for local communities (Gregory and Hunter 1995). Higher joblessness, particularly where it is regionally concentrated, may undermine the economic, human and social capital of communities, and thereby community strength. This is an empirical question the Families, Social Capital and Citizenship Project is designed to address.

There are also concerns about the high and rising number of Australians receiving welfare payments and the implications of this for the Commonwealth Budget.

These issues are not unique to Australia and there have been a variety of policy responses across countries. In Australia, the most recent review has just been completed by the Reference Group on Welfare Reform (the McClure report hereafter). The objective of welfare reform as outlined in the McClure report is to change the social security system from one based on ‘passive welfare’ to one based on encouraging social and economic participation. The McClure report outlines five principles which should guide this reform: individualised service delivery; simpler income support; better financial incentives and assistance, mutual obligation, and social partnerships (McClure 2000).

The government has also made clear its focus on increasing social and economic participation in its initial response to the McClure report (December 2000), which extends the expectation of participation to a wider range of welfare recipients than in the past, including sole parents (requirements differ for parents with dependent children of various ages, with part-time activity becoming compulsory for parenting payment recipients once their youngest child reaches the age of 13).

With the exception of mutual obligation and social partnerships, in which business and the government are seen to have a role to play, the remaining principles guiding welfare reform in the McClure report are focused primarily on supply side policies — that is, policies aimed at increasing participation. Furthermore, recommendations made in the McClure report to extend the notion of mutual obligation beyond current compulsory activities for some welfare recipients (eg. young unemployed) are generally focussed on encouraging welfare recipients to participate rather than mandating participation. In order to understand how effective these policies are likely to be, we need to understand how decisions about whether or not to participate in the labour market are made.

These issues form the basis of the third and fourth research projects in the Family and Society research program. The first project (see 3.1 below) will focus on family labour supply and seek to better understand how decisions about whether or not to participate in the labour market are actually made. Initially, this project will involve two parts. In the first part, new models of family labour supply will be developed and tested empirically, using existing data sources. Models will combine information on financial incentives with information on non-financial determinants of the decision to participate in the labour market (see 3.1.1 below).

In the second part, a more focused study will be conducted on people’s perception of what the financial incentives of work are. Much of the existing literature on family labour supply assumes that parents have perfect knowledge regarding the financial returns to taking up paid employment, although research has not yet established whether this assumption is actually justified. This will require a purpose designed primary data collection exercise (see 3.1.2 below).

The second research project (see 3.2 below) will review the international literature on the effectiveness of policies aimed at increasing employment rates of lone parents. The review will focus on lone parents because their increasing number is partially responsible for the dramatic increase in the number of families with children in which no adult is employed, and because lone parents may be facing some of the most dramatic changes as a result of the recent welfare reform proposals. This study will draw out implications for the likely effectiveness of different policies (both supply and demand side policies) in the Australian context.

The decision to participate in the labour market has been extensively studied by researchers from a range of academic disciplines. Economists have tended to focus on narrowly defined economic aspects and while there are many theoretical models of how the decision is made in a family context these models tend to focus on a relatively narrow range of factors. Furthermore there is a significant gap between the theoretical models and their empirical estimation (see Blundell and MaCurdy (1999) for a recent review of the economic literature).

Factors commonly included in empirical models of labour supply in economics are:

• Potential earnings if employed (as determined by productive characteristics including educational attainment and employment experience);
• Financial costs of participating in the labour market;
• unearned income (usually from assets);
• Income if not employed (usually welfare payments);
• Potential earnings of other members of family; and
• Family commitments.

Sociology has offered competing explanations for decisions to work as well as joblessness. Work has typically been understood in sociological terms as contributing to individual identity, fulfilment of gender roles, the attainment of status and the mechanics of power relations — as well as to financial imperatives. More recently the phenomenon of non-work has been the focus of debate. The ‘rediscovery of poverty’ in the 1970s led to a spate of research about the ‘structure’ of joblessness. In Australia, for example, research throughout the 1970s and 1980s linked poverty to the collapse of full employment, locational disadvantage, health, housing and family transitions across the lifecycle (see Fincher and Nieuwenhuysen 1998).

More recently, explanations that focus upon the attributes of individuals, in some cases linked to structural aspects of work, have broadened understandings of the dynamic between work and non-work in the lives of individuals and families. As set out in the Institute publication Reforming the Australian Welfare State (Saunders 2000), two of the most influential explanations for the substantial increases seen in the proportion of western populations receiving social security payments since the 1960s stem from the US. First, Murray (1994) argues that welfare state expansion has undermined the ethic of personal responsibility, by virtue of the idea that many poor people respond to increased welfare payments as ‘rational utility maximisers’, opting for welfare payments over wages and salary. Second, Mead, in contrast, argues that rather than deliberately avoiding work, structural causes (such as entrenched racism) result in a ‘culture of dependency’ among welfare recipients, which requires a combination of policy ‘help and hassle’ in order to be overcome (see Saunders (2000) for discussion).

The extent to which structural factors, individual attributes and/or culture affect the ways in which Australian families approach decisions about work remain under-explored. Similarly, the relative importance of economic versus sociological explanations for work and non-work go largely untested.

Some international research has, however, linked analysis of family life to decisions about work. Dean (2000) for example has shown that in the UK household strategies as much as individual decisions determine patterns of people’s participation in the labour market. US research suggests that individual and household decisions are embedded in the context of wider family and social networks, which are a source of behavioural norms, and can play a critical role in the transition to work through the provision of financial and non-financial support, information and contacts (Harris and Edin 2000).

Regarding the relative importance of financial incentives in determining family decisions to work, Barlow and Duncan (2000), suggest the influence of financial incentives on work decisions is secondary to the influence of social and moral issues. They argue that the decision to work is experienced as a ‘moral-economic’ one and must be understood through a cultural lens - that is, in relation to attitudes and norms regarding gender roles, work, parenting and citizenship; which vary between groups, neighbourhoods and welfare states. They find, for example, that some lone mothers in the UK see their responsibility to be a good mother as incompatible with paid work, regardless of the financial returns. Others see paid work as essential to being a good mother, because it provides their children with financial security and a good role model. In similar research in the United states, Edin (1991) finds lone mothers experience a tension between their sense of moral obligation to be a ‘good’ citizen — which leads them to work, and their sense of moral obligation to be a ‘good’ parent — which is a barrier to it.

In light of this research, Barlow and Duncan (2000) argue that policies aimed at encouraging work force participation by altering the associated financial costs and benefits may prove to be ineffective and inefficient, because they do not place sufficient weight upon these factors as determinants of the decision to work.

In sum, culture as well as family and social structure are influential in determining the decision to participate in the labour market. It is therefore important to develop empirical models of labour supply which meld together the approaches of economics and sociology, and to apply these to the Australian setting.

While all of the factors identified above are generally recognised as being important in determining how people make the decision to seek employment, they have rarely been incorporated into a single model that is capable of being empirically estimated. This project will develop and empirically estimate models of family labour supply which combine information on financial incentives with information on non-financial determinants of the decision to participate in the labour market.

Factors which will be modelled include: financial incentives (both at a point in time and over time); family characteristics (family structure, employment status of other family members); social networks; and perceptions of the impact of working on one’s ability to be a "good" parent, "good" partner and/or "good" citizen (gender role beliefs and practices, family values, culture and religion).

There are several existing data sets that will be useful for this purpose.

• Negotiating the Life Course Survey (NLCS) a longitudinal data set collected by researchers at ANU;
• Australian Life Course Survey (ALCS) collected by AIFS;
• Social Capital Survey currently being collected (see summary of Social Capital project in the research plan);
• Survey of Employment and Unemployment Patterns (SEUP) a longitudinal survey collected by the Australian Bureau of Statistics (ABS).

Empirical modelling of this type will allow new insights into many specific policy questions. For example, we will be better able to understand how effective increasing the financial incentives to work will be in increasing labour force participation.

In the longer term there may be great value to conducting a purpose designed survey. In particular, if the aforementioned data sets include only some of the factors theoretically expected to influence the decision to participate in the labour market, there will be a strong argument for conducting a purpose designed survey. It is possible that the Household, Income and Labour Dynamics Australia survey (HILDA) may be used to address this purpose in the future, depending on the range of information collected. The first wave of this survey will be collected during 2001 but data will not be available until 2002 at the earliest.

Much of the literature on labour supply assumes that there is perfect knowledge on the part of welfare recipients regarding the financial returns to taking up paid employment (see Blundell and MaCurdy 1999). However, there is some research that suggests this assumption may be incorrect. For example, for the UK, Marsh and McKay (1993) found that many low income families are uncertain of their eligibility for in-work benefits, have little awareness of the forms of assistance available to them and limited knowledge about family friendly work policy initiatives. They also found that many unemployed families are unable to estimate their likely earning power and systematically under-estimate the financial returns from work. These findings clearly have implications for the impact of financial incentives on participation in the labour market.

While research in the UK goes some way towards assessing low income families’ knowledge of the financial returns to taking up paid employment, there is very little comparable research in Australia. This project will be designed to fill this gap. The Australian system of income support payments is extremely complex and while recent changes attempt to reduce this complexity, it is plausible that a similar lack of knowledge and understanding as that found in the UK exists in Australia.

The research will focus on welfare recipients with caring responsibilities (predominantly children but also those caring for other family members with disabilities) and examine the ways in which they form expectations about the financial benefits of taking up paid employment. It will identify the extent to which these low income families attempt to calculate the financial return from employment, what information they take into account, where they get information from and how this information compares with the true financial incentives. This will include:

• awareness of the income support system, the taxation system and the way they interact with earnings;
• awareness of the forms of assistance available; and
• knowledge of the labour market and likely earnings.

Large-scale survey data, perhaps combined with detailed qualitative interviews, would be most appropriate for this study. Marsh and McKay’s (1993) study of 2,300 low income families in the UK provides a good example of this approach.

It does not appear that there are existing Australian data sets that can be used to address this question. We will investigate the feasibility of conducting such a survey of Australian families receiving social security payments (both employed and not employed low income families).

Most OECD countries have policies that are aimed at increasing the rate of employment amongst lone parents. These policies vary widely from country to country and include combinations of education and training, labour market programs (such as job search assistance), child-care and financial incentives. In Australia the most prominent policy is the Jobs, Education and Training (JET) program.

This project will review the international literature on the effectiveness of such policies and will draw out implications for the likely effectiveness of different policies in the Australian context. Attention will be paid to policies both on the demand and supply sides of the equation - that is, large scale job creation and other demand side activities as well as policies aimed at increasing participation.

Australia has relatively low rates of employment amongst lone parents as compared to many other OECD countries (Whiteford 2000a). The review of the experience of other countries will provide valuable insights into the reasons for this.

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Stone, W. (2001) Measuring social capital: towards a theoretically informed measurement framework for researching social capital in family and community life. Melbourne, Vic: Australian Institute of Family Studies, 38p, (Research Paper no.24) Paper online

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Whiteford, P., Stanton, D. and Gray, M. (2001) 'Families and income security: changing patterns of social security and related policy issues.' Family Matters no.60 Spring-Summer: 24-35.

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