Life after welfare: The economic well-being of welfare leavers in Canada during the 1990s

by Marc Frenette and Garnett Picot
Business and Labour Market Analysis Division
Analytical Studies Branch research paper series, No. 192

Context

The 1990s were characterized by substantial declines in the number of welfare recipients in most Canadian provinces. These declines occurred in a period of declining welfare benefits, tightening eligibility rules and sustained economic recovery.

Objective

The objective of this study is to answer the following question:

What happened to the economic well-being of those who left welfare in the 1990s?

Findings

After-tax family incomes rose in the majority (about 6 in 10) of people who stopped receiving welfare benefits during the 1990s. Employment earnings played a major role in these gains.

Just under one-third of welfare leavers saw their family income decline significantly following their exit. Their average family income after welfare was only about one-third of their average income while on welfare.

Over the five years following an individual leaving welfare, people generally became more self-sufficient, as average family earnings improved by 40%.

Within this five-year time frame, less than one-third of those who left welfare eventually returned for a full-year or more.

Changes in marital status played an important role both in terms of increasing the likelihood that someone would leave welfare and improving their financial situation after they had left.

Data Source : Longitudinal Administrative Databank 1992–1999.

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