Applied Research Bulletin - Volume 3, Number 1 (Winter-Spring 1997) - April 1997

Welfare Rates Affect Single Mothers' Labour Force Participation

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Welfare rates in Ontario had an unexpected impact on the labour force participation rates of single mothers in the early 1990s, according to an analysis produced by researcher Constantine Kapsalis.

In a working paper produced for Human Resources Development Canada (HRDC), Kapsalis reported that single mothers' employment rates in Ontario declined from 61.3 to 47.0 percent between 1988 and 1995. Over the same period, the employment rate for mothers with a spouse remained steady; in Quebec, meanwhile, the employment rate for women in both categories increased. (See chart on following page.)

The paper used longitudinal data from the 1988-90 Labour Market Activity Survey to explore social assistance entry and exit rates among lone mothers. The data indicated that each $1,000 increase in benefit rates is associated with a 1.9 percent reduction in employment rates.

The study raised particular concerns that a higher social assistance level could decrease exit rates from welfare among lone mothers: "Efforts to improve the income situation of lone mothers should be combined with work incentives to avoid a self-defeating reinforcement of long-term dependency on social assistance."

Source: Statistics Canada's "Labour Force Annual Averages" (Catalogue 71-220, CD-ROM Version)

Text version

Statistics from the National Council of Welfare and Human Resources Development Canada indicated that:

• Ontario's social assistance rate for a single parent with two children under 16 increased 41 percent, from $10,331 to $14,553 per year, between 1988 and 1990. The rate in Quebec increased 15 percent, from $8,688 to $9,948.

• Over the same period, the number of single parents receiving social assistance increased 26 percent in Ontario, but declined six percent in Quebec.

"Trends in the employment rate of lone mothers are of particular interest from the social policy point of view because of the high incidence of poverty, especially child poverty, among persons in such families," Kapsalis noted. Since single mothers are also at high risk of relying on social assistance, "the employment rate of lone mothers affects both welfare costs and child poverty."

The analysis also suggested strongly that groups at high risk of receiving social assistance, like single mothers, are particularly vulnerable when labour market conditions deteriorate. With the release of an updated Survey of Labour and Income Dynamics, researchers will have an opportunity to explore this issue in more depth.

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