Increases in income-support payments reduce the demand for charity: A difference-in-difference analysis of charitable-assistance data from Australia over the COVID-19 pandemic

PLOS ONE RESEARCH ARTICLE Increases in income-support payments reduce the demand for charity: A differencein-difference analysis of charitable-assistance data from Australia over the COVID-19 pandemic Christine Ablaza ID1,2*, Francisco Perales1,2, Cameron Parsell1,2, Nathan Middlebrook3, Richard N. S. Robinson4, Ella Kuskoff1,2, Stefanie Plage ID1,2 a1111111111 a1111111111 a1111111111 a1111111111 a1111111111 1 School of Social Science, The University of Queensland, St Lucia, QLD, Australia, 2 ARC Centre of Excellence for Children and Families Over the Life Course, The University of Queensland, St Lucia, QLD, Australia, 3 St. Vincent de Paul Society Queensland, South Brisbane, QLD, Australia, 4 UQ Business School, The University of Queensland, St Lucia, QLD, Australia * Abstract OPEN ACCESS Citation: Ablaza C, Perales F, Parsell C, Middlebrook N, Robinson RNS, Kuskoff E, et al. (2023) Increases in income-support payments reduce the demand for charity: A difference-indifference analysis of charitable-assistance data from Australia over the COVID-19 pandemic. PLoS ONE 18(7): e0287533. https://doi.org/10.1371/ journal.pone.0287533 Editor: Muhammad Khalid Bashir, University of Agriculture Faisalabad, PAKISTAN Received: November 29, 2022 Accepted: June 7, 2023 Published: July 12, 2023 Peer Review History: PLOS recognizes the benefits of transparency in the peer review process; therefore, we enable the publication of all of the content of peer review and author responses alongside final, published articles. The editorial history of this article is available here: https://doi.org/10.1371/journal.pone.0287533 Copyright: © 2023 Ablaza et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Charities play an increasingly important role in helping people experiencing poverty. However, institutionalized charity shifts the burden of poverty reduction away from the state and exposes recipients to stress and stigma. In this paper, we examine whether the need for institutionalized charity can be offset through enhanced state support. As in other countries, the Australian government responded to the COVID-19 pandemic by substantially increasing the level of income support to citizens through several temporary payments. We draw on this natural experiment and time-series data from the two largest charity organizations in Queensland, Australia to examine how these payments altered the demand for institutionalized charity. We model these data using difference-in-difference regression models to approximate causal effects. By exploiting the timing and varying amounts of the payments, our analyses yield evidence that more generous income support reduces reliance on charity. Halving the demand for charity requires raising pre-pandemic income-support by AUD $42/day, with supplements of approximately AUD$18/day yielding the greatest return on investment. Introduction Two decades into the 21st century, charity remains an ever-present and inescapable reality in the lives of many. Indeed, a growing number of citizens in advanced welfare states resort to charity organizations, including food banks, to meet their basic needs. This increase has been observed across countries with different cultural values and state-support practices, such as the US [1], UK [2], Australia [3], and Finland [4]. Charity and community-based ground-up models of assisting people in need are sometimes positioned as representing a natural form of help PLOS ONE | https://doi.org/10.1371/journal.pone.0287533 July 12, 2023 1 / 16 PLOS ONE Data Availability Statement: All relevant data are within the paper and its Supporting Information files. Funding: This research was supported by (i) the Australian Research Council Centre of Excellence for Children and Families over the Life Course (project number CE200100025), (ii) an Australian Future Fellowship Research Grant FT180100250), https://www.arc.gov.au/ and (iii) the St. Vincent de Paul Society Queensland, https://qld.vinnies.org. au/. There was no additional external funding received for this study. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. Competing interests: We have read the journal’s policy and the authors of this manuscript have the following competing interests to declare: N.M. works as Community Engagement Manager at St. Vincent de Paul Society Queensland (whose data was used in this study). The University of Queensland and St. Vincent de Paul Society Queensland have an ongoing research partnership, but the Society was not involved in the conceptualization, analysis, and preparation of this manuscript. The views expressed in this article do not necessarily represent the views of St. Vincent de Paul Society or The Salvation Army. This does not alter our adherence to PLOS ONE policies on sharing data and materials. Increases in income-support payments reduce the demand for charity and a manifestation of a connected and caring community [5–7]. Others advocate for institutionalized charity—or charity provided by organizations rather than individuals—over state support out of concern that the latter disincentivizes paid employment [8, 9]. For people who live in poverty, however, accessing charity is less than ideal. Reliance on charity brings about feelings of stress, shame, and stigmatization, and those who ask for charity liken the experience to ‘begging’, especially when the charitable make morally based judgements on the recipients’ deservingness [10, 11]. Further, institutionalized charity cannot fully address the extant needs of people in poverty [12], while also diverting attention from structural failure [13]. Multiple voices in the academic and service-delivery sectors strongly argue that, in advanced welfare states, the need for people to rely on charity and goodwill to eat, pay rent, or dress their children is the product of deliberate government decisions [14]. Some scholars maintain that, despite government rhetoric about financial constraints, the state has sufficient means to provide more generous income-support payments to people in need that would prevent this situation [15]. Beginning with Marshall [16], others emphasize governments’ moral responsibility to appropriately support citizens, as well as individuals’ basic social rights to an adequate level of income. In recent times, this principle is reflected in calls for a universal basic income that would negate the role of charity [17–19]. Recent changes in Australian welfare policy have reignited these debates about the role of the state in meeting citizen need. In response to the COVID-19 pandemic, the Australian government significantly increased the number, amount, and coverage of payments aimed at supporting the most vulnera (...truncated)