Welfare Participation and Labour Market Behaviour in Canada

Louis Christofides, Thanasis Stengos and Robert Swidinsky

Canadian Journal of Economics, 1997, vol. 30, issue 3, 595-621

Abstract: In this paper, bivariate probit estimation procedures and nonindependent selectivity adjustments are employed to investigate the determinants of the joint welfare participation-labor supply decisions made by single males, single females, lone fathers, and lone mothers, using data from the 1988-89 Labour Market Activity Survey. The bivariate probit results indicate that the welfare and labor-force participation decisions are not independent. Welfare program parameters, however, such as the basic allowance and the program tax rate, generally do not appear to influence the welfare participation, labor force participation, or hours worked decisions. Rather, these decisions are more strongly associated with personal characteristics and labor market conditions.

Date: 1997
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