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Why Australia should pay Indigenous children to attend school

By Andrew Leigh - posted Tuesday, 18 April 2006

Three years ago, Tania Major, a young Indigenous leader in the Cape York community, delivered a speech before the prime minister. Ms Major told the audience that she was the only one of her class of 15 who had finished high school, and the only girl in her class who was not a teenage mother. Of the boys in the class, seven had been incarcerated. Only three of the 15 were not alcoholics. And four had already committed suicide.

Completing school provides a building block to success later in life. Yet just 38 per cent (pdf file 792KB) of Indigenous children finish year 12 - half the rate among non-Indigenous children. With higher levels of sickness and poverty, worse housing, less stable family structures and racial harassment at school, an Indigenous child who finishes high school has probably cleared more hurdles (pdf file 792KB) than many of us will face in our lives. As a nation, we have a strong interest in keeping Indigenous children in school. It’s time we were willing to put cash on the table to make it happen.

The most direct way to improve the incentives for Indigenous children to stay in school would be to pay a daily attendance allowance. Beyond the age of 13, all Indigenous children would receive $10 for every full day that they attend school. Over the course of the year, perfect attendance would be worth about $2,000. The payment would complement the current ABSTUDY scheme, but would be contingent on daily attendance. The child would be free to spend the money as he or she wished.


While it may sound radical in the Australian context, educational authorities in many parts of the United States have been doing something similar, aiming to boost attendance rates for all students. With attendance rates a key indicator under the No Child Left Behind legislation, US school districts have been giving away cash, laptops and even the chance to win a car. Asked about the scheme, one school principal in a high-poverty Boston neighbourhood, Morton Orlov II, told the New York Times: “I was at first taken a little aback by the idea: we're going to pay kids to come to school? But then I thought perfect attendance is not such a bad behaviour to reward. We are sort of putting our money where our mouth is.”

In Australia, a state or federal government that implemented a similar scheme could expect to face plenty of criticisms.

Some would argue against special treatment for Indigenous Australians, pointing out that many non-Aboriginal people are also disadvantaged, and that not every Indigenous person lives on Struggle Street. While this is true, the simple answer is that the gulf between black and white Australians is dauntingly wide. With life expectancy of Indigenous Australians today similar to that of non-Indigenous Australians at federation, bridging that gap should be a top priority for social policy. Providing a positive incentive to attend can complement penalties, such as the “No School, No Pool” rules that currently operate in some communities.

Others will argue that putting a few extra dollars in the pockets of Indigenous children will contribute to other problems (“what if they spend it on drugs and alcohol?”). On this score, we can rest easy. Fears about children with too much disposable income are better directed at the three-figure sums of pocket money doled out each week to the boys and girls of Toorak and Vaucluse.

Another possible criticism is that children who attend school merely in order to get the cash will not learn anything useful. While this may sound plausible, research by Dr Chris Ryan and myself seems to debunk it. Analysing states with different compulsory leaving ages, we found that people who were “forced” to stay in school for an additional year earned about 10 per cent more as adults. In the words of Woody Allen, “Eighty per cent of success is showing up”.

Lastly, critics might argue that paying Indigenous youth to attend school is insufficient to redress the educational and social gaps that exist. This is doubtless true. But rather than hoping for a magic bullet, we should implement a spate of rigorous randomised trials of innovative solutions. At the same time as trialling a daily attendance allowance, we might also experiment with providing more support to new Aboriginal mothers, offering better after-school programs, and paying more to attract the best teachers to Indigenous communities.


With Australia now richer than ever, the living standard of the nation’s original inhabitants should be our greatest source of shame. We know from the research that schooling can help to break the cycle of poverty. Let’s open our wallets and do something about it.

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First published in the Sydney Morning Herald on April 7, 2006.

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About the Author

Andrew Leigh is the member for Fraser (ACT). Prior to his election in 2010, he was a professor in the Research School of Economics at the Australian National University, and has previously worked as associate to Justice Michael Kirby of the High Court of Australia, a lawyer for Clifford Chance (London), and a researcher for the Progressive Policy Institute (Washington DC). He holds a PhD from Harvard University and has published three books and over 50 journal articles. His books include Disconnected (2010), Battlers and Billionaires (2013) and The Economics of Just About Everything (2014).

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