Social Assistance use in Canada: national and provincial trends in
incidence, entry and exit
by Ross Finnie, Ian Irvine and Roger Sceviour
Business and Labour Market Analysis Division
Analytical Studies Branch research paper series, No. 245
Context
Social Assistance (SA) participation rose sharply during the recession
of the early 1990's. In response, virtually all provinces instituted
changes aimed at reducing SA dependency. Eligibility rules were tightened
(especially for new entrants), benefit levels were cut, "snitch"
lines were introduced, and other rule and procedural changes were adopted.
Meanwhile, the economy recovered, especially after 1995. Following these
developments, the number of SA-dependent individuals and value of benefits
received by SA recipients fell quite remarkably.
Objectives
We explore the dynamics of Social Assistance usage in Canada from 1993/94
to the end of the nineties using data based on tax files for between
2 and 4 million individuals in each year from Canada's Longitudinal
Administrative Data—the LAD.
The contribution of this paper is to map this cycle of SA dependency.
The longitudinal nature of the data, which define individuals both before
and after their participation in SA, as well as over the course of SA
spells, allows us to track not only participation rates in any given
year, but also entry and exit patterns. At the same time, the large
sample sizes available allow us to break this analysis down by family
type and province.
Findings
This paper has mapped social assistance participation in Canada using
longitudinal tax-based data that are uniquely well suited to this undertaking.
The major findings are as follows. For incidence and entry, rates peaked
between 1993 and 1995, and then declined dramatically over the rest
of the decade for all family types (singles, couples with children,
couples without children, and lone mothers), although there was considerable
variation in the precise pattern and extent of these declines. Exit
patterns, in contrast, differed much more strongly across family types:
couples with children and lone mothers experienced an increase in their
exit rates, whereas unattached individuals and couples without children
experienced the opposite. There were, furthermore, important differences
in these rates at the provincial level—in terms of magnitude,
timing and even the direction of changes.
These findings thus show both that social assistance participation
in Canada has been characterized by some important common trends and
by heterogeneity with respect to the particular dynamic in question:
incidence/entry/exit, family type, and province.
Data sources
1993-2000 Longitudinal Administrative Database
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