The Effects of Welfare Benefits on the Duration of Welfare Spells: Evidence from a Natural Experiment in Canada

  • Bernard Fortin
  • Denis Fougère
  • Guy Lacroix


The goal of the provincial welfare programs in Canada is to meet the basic needs of low-income individuals and households. The Canadian welfare system is a universal system in that it applies to all individuals over the age of 18 who fit the financial criteria and an assets test. Persons under the age of 18 are eligible if they have children. The duration of the welfare benefits is practically unlimited and their amount is annually reevaluated under an indexing procedure that varies according to the characteristics of the claimant and the size of his or her household. The earnings are implicitly taxed at a rather high level, which varies according to the characteristics of the household.1 In 1993, this implicit taxation rate was at 73% for single people without children, 91% for couples without children, 59% for two-parent families with children and 26% for single-parent families with a child under the age of six.2


Minimum Wage Transition Intensity Nonparametric Estimate Unemployment Benefit Unemployment Insurance 
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Copyright information

© Springer Science+Business Media New York 2002

Authors and Affiliations

  • Bernard Fortin
    • 1
  • Denis Fougère
    • 2
  • Guy Lacroix
    • 1
  1. 1.Université LavalQuébec, and CIRANOMontréal
  2. 2.Crest-Insee and CNRSParis, and CEPRLondon

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