State Dependence in Canadian Welfare Participation
This paper analyzes transitions into and out-of Social Assistance in Canada. We estimate a dynamic Probit model, controlling for endogenous initial conditions and unobserved heterogeneity, using longitudinal data extracted from the Survey of Labour and Income Dynamics (SLID) for the years 1993-2000. The data indicates that there are substantial provincial differences in social assistance participation. The empirical results indicate that a “welfare trap” does exist in Canada, but the extent of it varies across provinces. The results also suggest that there is a link between provincial variations in structural and spurious state dependence and regional differences in welfare generosity. In particular, the existence of structural state dependence, or a “welfare trap”, appears to be more likely in provinces with relatively high benefit levels. One implication of this result is that a change in the welfare benefit structure is not likely to lower participation as significantly among less generous provinces as more generous ones.
|Date of creation:||Aug 2006|
|Publication status:||published in: Research in Labor Economics, 2014, 39, 81-105|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
- Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
- Rebecca M. Blank, 2002.
"Evaluating Welfare Reform in the United States,"
Journal of Economic Literature,
American Economic Association, vol. 40(4), pages 1105-1166, December.
- Hansen, Jörgen & Löfström, Magnus, 2001.
"The Dynamics of Immigrant Welfare and Labour Market Behaviour,"
CEPR Discussion Papers
3028, C.E.P.R. Discussion Papers.
- Hansen, Jörgen & Lofstrom, Magnus, 2001. "The Dynamics of Immigrant Welfare and Labor Market Behavior," IZA Discussion Papers 360, Institute for the Study of Labor (IZA).
- Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
- Barrett, Garry F., 2000. "The effect of educational attainment on welfare dependence: Evidence from Canada," Journal of Public Economics, Elsevier, vol. 77(2), pages 209-232, August.
- Blank, Rebecca M., 1989. "Analyzing the length of welfare spells," Journal of Public Economics, Elsevier, vol. 39(3), pages 245-273, August.
- Kapsalis, Costa, 2001. "An Assessment of EI and SA Reporting in SLID," Analytical Studies Branch Research Paper Series 2001166e, Statistics Canada, Analytical Studies Branch.
- Bernard Fortin & Denis Fougère & Guy Lacroix, 2000. "The Effects of Welfare Benefits on the Duration of Welfare Spells : Evidence from a Natural Experiment in Canada," Working Papers 2000-14, Centre de Recherche en Economie et Statistique.
- Lee, Lung-Fei, 1997.
"Simulated maximum likelihood estimation of dynamic discrete choice statistical models some Monte Carlo results,"
Journal of Econometrics,
Elsevier, vol. 82(1), pages 1-35.
- Lee, L.F., 1994. "Simulated Maximum Likelihood Estimation of Dynamic Discrete Choice Statistical Models--Some Monte Carlo Results," Papers 94-06, Michigan - Center for Research on Economic & Social Theory.
- Robert A. Moffitt, 1999. "The Effect of Pre-PRWORA Waivers on AFDC Caseloads and Female Earnings, Income, and Labor Force Behavior," JCPR Working Papers 89, Northwestern University/University of Chicago Joint Center for Poverty Research.
- Curtis Eberwein & John C. Ham & Robert J. Lalonde, 1997. "The Impact of Being Offered and Receiving Classroom Training on the Employment Histories of Disadvantaged Women: Evidence from Experimental Data," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 655-682.
- Enberg, John & Gottschalk, Peter & Wolf, Douglas, 1990. "A random-effects logit model of work-welfare transitions," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 63-75.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2266. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.