Abstract
Despite comparatively modest welfare reforms in Canada relative to those of the United States, employment rates and earnings among single mothers have risen by virtually identical magnitudes in the two countries since 1980. We show that most of the gains in Canada and a substantial share of the change in the US were the result of the dynamics of cohort replacement and population aging as the large and better educated baby boom generation replaced earlier cohorts and began entering their forties. In both countries, demographic effects were the main factor accounting for higher employment and earnings among older (40+) single mothers. Changes among younger single mothers, in contrast, were mainly the result of changes in labor market behavior and other unmeasured variables. Overall, demographic changes dominated in Canada but not in the US for two reasons: (a) Canadian single mothers are significantly older than their US counterparts; and (b) consistent with the welfare reform thesis, the magnitude of behavioral change among younger single mothers was much larger in the US.
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Notes
For example, in Ontario, social assistance benefits for single parents were cut by 21% and single parents were required to participate in mandatory work-first programs that focused on rapidly attaching participants to the labor market, although exceptions were made for single parents with pre-school children (McMullin et al. 2002).
We use the term “consistent with” since our analytical strategy does not allow us to isolate the net effect of social policy changes vs. other unmeausured variables that could account for changes in labor market behavior.
The US observation years are somewhat superior in this respect. The observation year for the 1990 census is 1989, before the onset of the recession that began in the middle of 1990.
Since our focus is on change in log earnings (which approximates a percentage change) rather than the absolute change, earnings are expressed in national currencies without adjustment for differences in purchasing power.
Our marital status indicator is less than ideal since, among the never married, we cannot separate the previously single from those previously in common law unions.
Canadian and US educational systems are very similar in organization (Davies and Guppy 2006). However, university enrolment expanded later in Canada than in the US and attendace at non-degree granting post-secondary institutions (called “colleges” in Canada) is higher than in the US.
Suppose we have regression models Y 1 = α1 + β1i X 1i + e1 for time 1 and Y 2 = α1 + β2i X 2i + e2 for time 2, where Y 1 and Y 2 are the probablity of being employed at time 1 and time 2; X 1i and X 2i are the same set of control variables measured at time 1 and 2; and β1i and β2i are their coefficients. Based on the regression model for each year in Appendix Tables 8 and 9, we can decompose the change in the employment rate between two years \( \left( {\overline{{Y_{2} }} - \overline{{Y_{1} }} } \right) \) into three components: (1) the contribution of compositional changes to the change in the employment rate equals the sum of the differences in the means of X 2i and X 1i, weighted by β 1i; (2) the contribution of changes in coefficients equals the sum of the differences in β 2i and B 1i, weighted by X 1i, and (3) the joint effect of changes in means and coefficients equals the sum of (β 2i − β 1i)*(X 2i − X 1i).
Separate analyses for these two provinces also show a somewhat different pattern from national trends. During the 1990, employment levels rose by 8.8 and 7.5 percentage points among lone mothers in Alberta and Ontario. Quebec lone mothers, however, had the highest employment growth in the 1990 (9.4 percentage points) and by 2000 their employment levels were four percentage points higher than in the rest of Canada. Compositional shifts accounted for only 28 percent of the growth in the 1990, results that are consistent with conclusions concerning the effects of liberalized child care provisions in that province (Baker et al. 2005; Lefebvre and Merrigan 2005).
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Myles, J., Hou, F., Picot, G. et al. The Demographic Foundations of Rising Employment and Earnings among Single Mothers in Canada and the United States, 1980–2000. Popul Res Policy Rev 28, 693–720 (2009). https://doi.org/10.1007/s11113-008-9125-2
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DOI: https://doi.org/10.1007/s11113-008-9125-2