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The Duration of Spells on Welfare and Off-welfare among Lone Mothers in Ontario

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  • Jennifer Stewart
  • Martin Dooley

Abstract

This paper provides a first look at the dynamics of social assistance use among lone mothers in Ontario. We use an administrative caseload data set to analyse the relationship between the duration of spells, both on welfare and off welfare, and a series of factors including the clients’ personal characteristics, their history of welfare use, the duration of current spells, labour market conditions and social assistance benefit levels. We find mixed evidence concerning the key policy question of the scarring or stigmatizing effects of welfare, that is, a “welfare trap”. There is evidence that the likelihood of exiting welfare declines during the first year of a spell. The support is weakest, however, in our preferred specification. There is more consistent evidence that the likelihood of returning to welfare declines during the first year after an exit, that is, staying off the rolls has the beneficial effect of making recidivism less likely. Clients who have spent more months on welfare in the past (controlling for age) do appear to have somewhat longer future spells on welfare and to return more quickly to the rolls once they leave, but the magnitude of this effect is very small. The length of both welfare and off-welfare spells is very sensitive to the levels of welfare benefits. Most of the other coefficients have significant effects of the expected sign. Welfare spells tend to be longer for those lone mothers who are younger, poorly educated, never married, not employable and for those who have more and younger children. Spell lengths also increase with the level of the unemployment rate and decrease with the level of the minimum wage. Off-welfare spells tend to be shorter (the return to welfare more rapid) for those lone mothers who are older, never married, not employable and who have very young children. Off- welfare spells are longer when the minimum wage is higher.

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Bibliographic Info

Paper provided by McMaster University in its series Canadian International Labour Network Working Papers with number 21.

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Length: 118 pages
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Handle: RePEc:mcm:cilnwp:21

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References

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  1. Louis N. Christofides & Michael Hoy & Ling Yang, 2006. "The Determinants of University Participation," Working Papers 0608, University of Guelph, Department of Economics and Finance.
  2. Garry F. Barrett & Michael I. Cragg, 1998. "An Untold Story: The Characteristics of Welfare Use in British Columbia," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 165-188, February.
  3. Louis N. Christofides & Thanasis Stengos & Robert Swidinsky, 1997. "Welfare Participation and Labour Market Behaviour in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 30(3), pages 595-621, August.
  4. Blank, Rebecca M., 1989. "Analyzing the length of welfare spells," Journal of Public Economics, Elsevier, vol. 39(3), pages 245-273, August.
  5. O'Neill, June A & Bassi, Laurie J & Wolf, Douglas A, 1987. "The Duration of Welfare Spells," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 241-48, May.
  6. Michael Charette & Ronald Meng, 1994. "The Determinants of Welfare Participation of Female Heads of Household in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 27(2), pages 290-306, May.
  7. Plant, Mark W, 1984. "An Empirical Analysis of Welfare Dependence," American Economic Review, American Economic Association, vol. 74(4), pages 673-84, September.
  8. Allen, Douglas W, 1993. "Welfare and the Family: The Canadian Experience," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages S201-23, January.
  9. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
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Cited by:
  1. Irvine, Ian & Finnie, Ross & Sceviour, Roger, 2005. "Social Assistance Use in Canada: National and Provincial Trends in Incidence, Entry and Exit," Analytical Studies Branch Research Paper Series 2005245e, Statistics Canada, Analytical Studies Branch.
  2. Irvine, Ian & Finnie, Ross & Sceviour, Roger, 2004. "Welfare Dynamics in Canada: The Role of Individual Attributes and Economic-policy Variables," Analytical Studies Branch Research Paper Series 2004231e, Statistics Canada, Analytical Studies Branch.
  3. Ayala, Luis & Rodriguez, Magdalena, 2007. "Barriers to employment and welfare dynamics: Evidence from Spain," Journal of Policy Modeling, Elsevier, vol. 29(2), pages 237-257.
  4. Guy Lacroix & Gino Santarossa & Pierre Gagné, 2003. "Une analyse de la dynamique de la dépendance à l'assistance-emploi des populations natives et immigrantes québécoises," CIRANO Project Reports 2003rp-14, CIRANO.
  5. Lori J. Curtis & Kathleen Rybczynski, 2013. "Exiting Poverty: Does Sex Matter?," Working Papers 1307, University of Waterloo, Department of Economics, revised Sep 2013.
  6. Irvine, Ian & Finnie, Ross & Sceviour, Roger, 2004. "La dynamique de l'aide sociale au Canada : le role des attributs individuels et des variables economiques et politiques," Direction des etudes analytiques : documents de recherche 2004231f, Statistics Canada, Direction des etudes analytiques.
  7. Fortin, Bernard & Lacroix, Guy & Drolet, Simon, 2004. "Welfare benefits and the duration of welfare spells: evidence from a natural experiment in Canada," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1495-1520, July.
  8. Louis N. Christofides, 2000. "Social assistance and labour supply," Canadian Journal of Economics, Canadian Economics Association, vol. 33(3), pages 715-741, August.
  9. Lars Osberg & Kuan Xu, 1999. "Poverty Intensity: How Well Do Canadian Provinces Compare?," Canadian Public Policy, University of Toronto Press, vol. 25(2), pages 179-195, June.

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