Cycling Off and On Welfare in Canada

Abstract

AbstractInternationally, traditional approaches to social assistance (welfare) have increasingly been replaced with ‘active’ labour market policies. Alongside other industrialised countries, Canada embraced this shift, with its emphasis on the ‘shortest route’ to paid employment.There has been little research on the outcomes of these dramatic changes in Canada, especially longer term. This article explores the post-welfare labour market experiences of people who were on social assistance in Canada in 1996. It uses the longitudinal micro-data files of the Survey of Labour and Income Dynamics (SLID) from Statistics Canada, which tracks a panel of recipients over five years. We examine the mixing of work and welfare, the transition from welfare to work, and selected labour market indicators – primarily hours of work and wages – that those in receipt of social assistance face in assuming paid work.Those leaving welfare for work face precarious employment opportunities. Leavers earn lower wages, work fewer hours and consequently have lower annual earnings than non-recipients. Over time the gap narrows but remains significant, even after six years. Returns to welfare are frequent. Overall, even after six years most social assistance recipients remained marginalised in the periphery of the labour market.