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

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  • Bernard Fortin
  • Guy Lacroix
  • Jean-François Thibault

Abstract

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.

Suggested Citation

  • Bernard Fortin & Guy Lacroix & Jean-François Thibault, 1999. "The Interaction of UI and Welfare, and the Dynamics of Welfare Participation of Single Parents," Canadian Public Policy, University of Toronto Press, vol. 25(s1), pages 115-132, November.
  • Handle: RePEc:cpp:issued:v:25:y:1999:i:s1:p:115-132
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    References listed on IDEAS

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    1. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    2. 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.
    3. 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 431-444, March.
    4. Fortin, Pierre, 1989. "How 'natural' is Canada's high unemployment rate?," European Economic Review, Elsevier, vol. 33(1), pages 89-110, January.
    5. Katz, Lawrence F. & Meyer, Bruce D., 1990. "The impact of the potential duration of unemployment benefits on the duration of unemployment," Journal of Public Economics, Elsevier, vol. 41(1), pages 45-72, February.
    6. 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.
    7. 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 241-248, May.
    8. Blank, Rebecca M., 1989. "Analyzing the length of welfare spells," Journal of Public Economics, Elsevier, vol. 39(3), pages 245-273, August.
    9. 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 96-147, January.
    10. Duclos, Jean-Yves & Fortin, Bernard & Lacroix, Guy & Roberge, Hélène, 1998. "The Dynamics of Welfare Participation in Québec," Cahiers de recherche 9817, Université Laval - Département d'économique.
    11. Phipps, Shelley, 1990. "Quantity-Constrainted Household Responses to UI Reform," Economic Journal, Royal Economic Society, vol. 100(399), pages 124-140, March.
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    Cited by:

    1. Stephen Whelan, 2010. "The Interaction between Income Support Programs," LABOUR, CEIS, vol. 24(4), pages 407-440, December.
    2. 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.
    3. Luis Ayala & César Pérez, 2005. "Macroeconomic conditions, institutional factors and demographic structure: What causes welfare caseloads?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(3), pages 563-581, September.
    4. Rebecca N. Warburton & William P. Warburton, 2004. "Canada Needs Better Data for Evidence-Based Policy: Inconsistencies Between Administrative and Survey Data on Welfare Dependence and Education," Canadian Public Policy, University of Toronto Press, vol. 30(3), pages 241-256, September.

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