Working Paper: NBER ID: w23380
Authors: Hilary Hoynes; Mark Stabile
Abstract: The past 25 years has seen substantial change in the social safety nets for families with children in the US and Canada. Both countries have moved away from cash welfare but the US has done so relying more exclusively on inwork benefits with work requirements. This paper examines this evolution across the two countries and examines the effects on employment and poverty. In particular, we focus on the two largest programs over this period: the U.S. EITC and the Canadian NCB/CCTB. In light of these policy changes, we examine trends in employment and poverty of the most affected families -- single mothers with less than a college degree -- across the two countries. We find that employment improved substantially in both countries, absolutely and relative to a control group of single women without children. The cross-country differences in relative trends are mainly explained by differences in the labor market conditions. Poverty rates for single mothers also declined in both countries with more of the decline coming through market income in the U.S. and benefit income in Canada.
Keywords: social safety nets; employment; poverty; single mothers
JEL Codes: H24; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Social safety net programs (I38) | employment for single mothers (J12) |
| Social safety net programs (I38) | poverty rates for single mothers (I32) |
| Expansion of in-work benefits (J68) | employment for single mothers (J12) |
| Changes in labor market conditions (J29) | employment for single mothers (J12) |
| Labor market conditions (J29) | poverty rates for single mothers (I32) |
| EITC introduction and evolution (H26) | labor force attachment for single mothers (J22) |
| NCB introduction and evolution (N20) | labor force attachment for single mothers (J22) |
| US market income gains (F61) | poverty rates for single mothers (I32) |
| Canada benefit income gains (O51) | poverty rates for single mothers (I32) |