How do the U.S and Canadian Social Safety Nets Compare for Women and Children?

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.

Intergenerational Mobility Between and Within Canada and the United States

“…These differences imply different public policy capacities. Hoynes and Stabile (2017) document the very dramatic differences in income support for lower income families in the two countries, the safety net being drawn much more tightly in Canada. Even if underlying values are the same in these two countries, perceptions about the role of public policy-and ultimately the range and design of policy-may be very different.…”

Local Labor Markets in Canada and the United States

“…The means-testing of individual transfers should further dull incentives, as various clawbacks raise the effective marginal tax rate even further. Although programs differ by location and individual, these disincentives appear to be generally stronger in Canada (Hoynes and Stabile, 2017). However, as noted in Milligan and Schirle (2017), the relative generosity of the U.S. disability insurance system could do more to pull U.S. workers out of the labor force.…”

Relative Poverty in Great Britain and the United States, 1979–2017

“…We conclude by offering a set of open research questions that need to be answered in order to better inform evidence-based policymaking. These questions touch on research needs on social welfare programmes (including 5 Hoynes and Stabile, 2019;Morelli et al, 2015;OECD, 2008;Wimer and Smeeding, 2017. 6 Blank, 2002;Grogger and Karoly, 2005;Ziliak, 2008;Moffitt, 2015.…”