The impact of welfare on the economic status of Aboriginal women

Despite the relatively low levels of employment among Aboriginal women, their average income, according to the 1986 Census, was not substantially lower than the average income of Australian women in general. The Census does not distinguish sources of income, but other evidence suggests that welfare payments are important in raising the average income of individual Aboriginal women to a level not very different from that of all Australian women. The Aboriginal Employment Development Policy (AEDP) has the stated goal of reducing Aboriginal welfare dependency and this paper considers some of the problems that will be associated with this goal for Aboriginal women. Expected earnings from full-time employment are predicted for Aboriginal and non-Aboriginal women based on individual characteristics such as education, potential labour market experience, marital status and location of residence. These are compared with welfare entitlements in the calculation of a replacement ratio. The replacement ratio measures the extent to which income from welfare compensates for lack of income from employment. These calculations, which are a conservative estimate, show that the replacement ratio for Aboriginal women in 1986 was higher than for non-Aboriginal women. The results suggest that it will be difficult to reduce the welfare dependence of Aboriginal women and the implications of these findings for policy are discussed in the final section