Profiles and Transitions of Groups at Risk of Social Exclusion: Lone Parents

This study attempts to answer the following basic question: why do some lone parents escape low income or never enter spells of low income or social assistance (SA), while others remain in low income or on SA for many years? The analysis relies on the 1993-98 longitudinal panel of the Survey of Labour and Income Dynamics (SLID). The main focus is lone mothers, since they account for 93% of low income lone parents. The results make somewhat of a case for investing more in education. However, this is not conclusive. Many lone mothers who are in low income or SA recipients have a post-secondary certification. Also, a higher level of education does not seem to have any benefits in terms of shortening SA spells. The fact that half of new SA recipients exit within the first two years suggest that policies should be well targeted. However, waiting for several years to ascertain who are long term recipients is not the best targeting strategy. Not only is valuable time wasted, but there is evidence that the longer individuals stay on SA, the more difficult it is to exit. A better strategy is to keep probing the characteristics of SA recipients that are associated with long spells and develop programs that are targeted to those characteristics. And since lack of paid work or limited attachment to paid work are common factors among the low income and SA recipients, the main focus should be on providing employment services (such as referrals and employment counseling), coupled with a more generous treatment of earnings under SA and wage subsidies to those able to work a significant number of paid hours.