Income and immunity: The consequences of social security administration reform for childhood infection risk

We analyse the impact of a change in the administration of social security payments, occurring in utero and early infancy, on health in early childhood. We identify this impact through the gradual rollout of the so-called 'income management' policy in Aboriginal communities in Australia's Northern Territory in 2007. This policy changed the delivery method of social security payments but not their value - however, implementation challenges meant that many families did not receive their payments on time. Using linked administrative data, we find that children who were exposed to the policy rollout in utero or in their first three months of life (the 'fourth trimester') were at higher risk of severe infection requiring hospitalisation. These children spent, on average, 4.7 more days in hospital between birth and their 8th birthday. Most of this impact is concentrated in hospitalisations for infection, which increased by 23 percent. These admissions are driven by a range of infection types: bacterial, viral and respiratory. We link our findings to the 'immune programming hypothesis', i.e. maternal stress and poor nutrition during key stages in immune system development can permanently weaken the child's immune system. Our findings highlight the importance of attention to key phases in child development when designing policies that affect households' financial resources, even temporarily.