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The Interaction of UI and Welfare, and the Dynamics of Welfare Participation of Single Parents

  • Bernard Fortin
  • Guy Lacroix
  • Jean-François Thibault

The main goal of this paper is to analyze the impact of the unemployment insurance (UI) program on the rates of entry into and exit from welfare by single-parent households in Quebec. The database we used comes from Quebec welfare records and comprises over 11,180 single parent households, most of which (92 percent) are headed by a woman. Our results show that tightening the conditions of eligibility to UI causes a reduction of exits from welfare, especially for the older group, and an increase in re-entries. Similarly, a cut in the UI replacement rate raises the rate of re-entry into welfare. Our results indicate that cuts in the UI program may partially explain the increase in the welfare participation of lone mothers observed recently.

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Article provided by University of Toronto Press in its journal Canadian Public Policy.

Volume (Year): 25 (1999)
Issue (Month): s1 (November)
Pages: 115-132

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Handle: RePEc:cpp:issued:v:25:y:1999:i:s1:p:115-132
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  1. Duclos, J.Y. & Fortin, B. & Lacroix, G. & Roberge, H., 1998. "The Dynamics of Welfare Participation in Quebec," Papers 9817, Laval - Recherche en Politique Economique.
  2. Lawrence Katz & Bruce Meyer, 1988. "The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment," Working Papers 621, Princeton University, Department of Economics, Industrial Relations Section..
  3. Hanoch, Giora & Honig, Marjorie, 1978. "The labor supply curve under income maintenance programs," Journal of Public Economics, Elsevier, vol. 9(1), pages 1-16, February.
  4. Dolton, Peter J & van der Klaauw, Wilbert, 1995. "Leaving Teaching in the UK: A Duration Analysis," Economic Journal, Royal Economic Society, vol. 105(429), pages 431-44, March.
  5. Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
  6. Blank, Rebecca M., 1989. "Analyzing the length of welfare spells," Journal of Public Economics, Elsevier, vol. 39(3), pages 245-273, August.
  7. Anderson, Patricia M, 1992. "Time-Varying Effects of Recall Expectation, a Reemployment Bonus, and Job Counseling on Unemployment Durations," Journal of Labor Economics, University of Chicago Press, vol. 10(1), pages 99-115, January.
  8. Phipps, Shelley, 1990. "Quantity-Constrainted Household Responses to UI Reform," Economic Journal, Royal Economic Society, vol. 100(399), pages 124-40, March.
  9. 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.
  10. Green, David A & Riddell, W Craig, 1993. "The Economic Effects of Unemployment Insurance in Canada: An Empirical Analysis of UI Disentitlement," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages S96-147, January.
  11. Fortin, Pierre, 1989. "How 'natural' is Canada's high unemployment rate?," European Economic Review, Elsevier, vol. 33(1), pages 89-110, January.
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