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Did Canadian welfare reform work? The effects of new reform strategies on social assistance participation

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  • Nathan Berg
  • Todd Gabel

Abstract

This paper measures the extent to which declines in social assistance (SA) participation were associated with novel and aggressive reforms referred to as new reform strategies: work requirements, diversion, earning exemptions and time limits. Controlling for province‐specific benefit levels, eligibility requirements, GDP growth, labour market conditions and demographics, SA participation rates were more than one percentage point lower (equivalent to a 13% decline) in provinces with new reforms. Work requirements with strong sanctions had the sharpest negative associations. New reform strategies explain at least 10% of observed declines in SA participation, twice that of benefit levels and eligibility requirements. Est‐ce que la réforme de l'aide sociale est un succès? Les effets des nouvelles stratégies de réforme sur la participation à l'aide sociale. Ce mémoire mesure la taille du déclin de la participation à l'aide sociale (AS) associée aux réformes inédites et agressives qu'on a nommées nouvelles stratégies de réforme: travail requis, diversion vers d'autres programmes, exemptions de gains, et limites temporelles. Normalisés pour tenir compte des niveaux de prestation spécifiques aux provinces, pour les conditions d'éligibilité, pour la croissance du PIB, pour les conditions du marché du travail et la situation démographique, les taux de participation à l'aide sociale étaient plus d'un point de pourcentage plus bas (ce qui équivalait à un déclin de 13 %) dans les provinces à la suite des nouvelles réformes. Les conditions de travail requis et les fortes sanctions attenantes ont eu l'impact négatif le plus fort. Les nouvelles stratégies de réforme expliquent au moins 10 % du déclin dans la participation à l'AS, soit le double de l'impact des changements dans les niveaux de prestation et des conditions d'éligibilité.

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  • 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.
    • Handle: RePEc:wly:canjec:v:48:y:2015:i:2:p:494-528
    DOI: 10.1111/caje.12134
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    2. Cairo, Sofie & Mahlstedt, Robert, 2021. "Transparency of the Welfare System and Labor Market Outcomes of Unemployed Workers," IZA Discussion Papers 14940, Institute of Labor Economics (IZA).
    3. Chris Riddell, 2020. "Welfare to work and subjective well‐being: Evidence from a randomized control trial," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(1), pages 83-107, February.
    4. Nathan Berg & Yuki Watanabe, 2020. "Conservation of behavioral diversity: on nudging, paternalism-induced monoculture, and the social value of heterogeneous beliefs and behavior," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 19(1), pages 103-120, June.
    5. Green, David A. & Riddell, William Craig, 2017. "Is there a tradeoff between ethnic diversity and redistribution? The case of income assistance in Canada," CLEF Working Paper Series 10, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    6. Masayoshi Hayashi, 2017. "Do Central Grants Affect Welfare Caseloads? Evidence from Public Assistance in Japan," CIRJE F-Series CIRJE-F-1064, CIRJE, Faculty of Economics, University of Tokyo.

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    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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