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Social assistance and labour supply

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  • Louis N. Christofides

Abstract

The longitudinal, 1988–89 LMAS makes it possible to study the interaction between social assistance and labour supply while allowing for substantial time dependence. Tobit equations for hours worked on and off social assistance, which allow for endogenous selection of social assistance status, are estimated by using FIML. Small, but statistically significant, effects for a social assistance benefit variable are obtained, particularly for females. A claw‐back variable is not consistently useful. The wage rate has a consistently negative coefficient in the selection equations and is important in the Tobit equations. In this paper an attempt is made to reconcile results found in earlier literature. JEL Classification: I38, J22 Aide sociale et offre de travail. L'étude longitudinale de l'Enquête de 1988‐89 sur la population active rend possible l'étude de l'interaction entre l'aide sociale et l'offre de travail tout en permettant la prise en compte de l'effet d'inertie hérité du passé. On calibre des équations Tobit pour les heures travaillées séparément pour les personnes qui reçoivent et ne reçoivent pas d'aide sociale et une équation probit qui permet une sélection endogène du statut d'assisté social en utilisant la méthode du maximum de vraisemblance avec pleine information. On obtient des impacts faibles mais statistiquement significatifs des prestations d'aide sociale sur l'offre de travail pour les femmes. Une variable qui tente de capturer les effets de recouvrement fiscal des prestations n'est pas uniformément utile comme source d'explication. Le taux de salaire a un coefficient négatif de manière générale dans les équations de sélection et est important dans les équations Tobit. Le mémoire tente de réconcilier ces résultats avec ceux que contiennent les études antérieures.

Suggested Citation

  • Louis N. Christofides, 2000. "Social assistance and labour supply," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(3), pages 715-741, August.
    • Handle: RePEc:wly:canjec:v:33:y:2000:i:3:p:715-741
    DOI: 10.1111/0008-4085.00038
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    1. Berg, Nathan & Gabel, Todd, 2010. "New Reform Strategies and Welfare Participation in Canada," MPRA Paper 26591, University Library of Munich, Germany.
    2. Schneider Hilmar & Zimmermann Klaus F. & Uhlendorff Arne, 2013. "Ökonometrie vs. Projektdesign: Lehren aus der Evaluation eines Modellprojekts zur Umsetzung des Workfare-Konzepts," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(1), pages 65-85, February.
    3. Schneider, Hilmar & Uhlendorff, Arne & Zimmermann, Klaus F., 2010. "Mit Workfare aus der Sozialhilfe? Lehren aus einem Modellprojekt," IZA Standpunkte 33, Institute of Labor Economics (IZA).
    4. Stephen Whelan, 2010. "The Interaction between Income Support Programs," LABOUR, CEIS, vol. 24(4), pages 407-440, December.
    5. Harald Badinger & Thomas Url, 2002. "Determinants of regional unemployment: some evidence from Austria," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 977-988.
    6. Stephen Whelan, 2010. "The take-up of means-tested income support," Empirical Economics, Springer, vol. 39(3), pages 847-875, December.
    7. Nathan Berg & Todd Gabel, 2015. "Did Canadian welfare reform work? The effects of new reform strategies on social assistance participation," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(2), pages 494-528, May.
    8. Finnie, Ross & Meng, Ronald, 2006. "The Importance of Functional Literacy: Reading and Math Skills and Labour Market Outcomes of High School Drop-outs," Analytical Studies Branch Research Paper Series 2006275e, Statistics Canada, Analytical Studies Branch.

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    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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