The Duration of Spells on Welfare and off Welfare among Lone Mothers in Ontario

Abstract

We use administrative data to provide a first look at the dynamics of social assistance use among lone mothers in Ontario between 1990 and 1994. The evidence is mixed concerning a trap. Welfare exit rates do decline during the first year of a spell but the support is weakest in our preferred specification. The data more consistently indicate the decline in exit rates from an off-welfare spell (the likelihood of recidivism) during the 12 months following an exit from social assistance. More months of welfare use during past spells are associated with both longer future spells on welfare and shorter future spells off-welfare, but the magnitude of both effects is quite small. The length of both welfare and off-welfare spells is very sensitive to the levels of welfare benefits. Welfare spells are longer for lone mothers who are younger, poorly educated, never married, not employable, and for those who have more and younger children. Spell lengths also increase with the unemployment rate and decrease with the minimum wage. Off-welfare spells are shorter for those lone mothers who are older, never married, not employable, and who have very young children. Off-welfare spells are longer when the minimum wage is higher.