Effects of a child's disability on affected female's labour supply in Australia

Australia has experienced a growing rate of child disability, with the rate of 3.7 per cent in 1998 increasing to 4.3 per cent in 2003 for children aged under four years and from 9.5 per cent to 10 per cent for children aged five to 14 years in the same period. However, surprisingly no study has examined the economic effects of child disability in the Australian context. This paper attempts to quantify the link between a child's disability and the work behaviour of the female in the affected family. Our findings provide empirical justifications for the current policy linking the severity level of child disability to the assessment of eligibility for Carer Payment (Child). We also found that child disability has different impacts on the labour market activities of married women and non-married women. It appears that child disability imposes a greater hardship on non-married women than on married women in terms of work choice decision. Once non-married women manage to enter the labour force, they may have to stay on to work as usual even if they have a disabled child, because they may not have other family members to turn to for help as married women do.