Why is the rate of single-parenthood lower in Canada than in the U.S.? A dynamic equilibrium analysis of welfare policies

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dc.contributor.author Guner, Nezih
dc.contributor.author Knowles, John
dc.date.accessioned 2009-09-08T11:19:51Z
dc.date.available 2009-09-08T11:19:51Z
dc.date.issued 2009
dc.identifier.bibliographicCitation Canadian Journal of Economics/Revue canadienne d'économique. 2009, vol. 42, nº 1, p 56-89
dc.identifier.issn 1540-5982
dc.identifier.uri http://hdl.handle.net/10016/5089
dc.description.abstract A critical question in the design of welfare policies is whether to target aid according to household composition, as was done in the U.S. under the Aid to Families with Dependent Children (AFDC) program, or to rely exclusively on means-testing, as in Canada. Restricting aid to single mothers, for instance, has the potential to distort behaviour along three demographic margins: marriage, fertility, and divorce.We contrast the Canadian and the U.S. policies within an equilibrium model of household formation and human capital investment on children. Policy differences we consider are eligibility, dependence of transfers on the number of children, and generosity of transfers. Our simulations indicate that the policy differences can account for the higher rate of single-parenthood in the U.S. They also show that Canadian welfare policy is more effective for fostering human capital accumulation among children from poor families. Interestingly, a majority of agents in our benchmark economy prefers a welfare system that targets single mothers (as the U.S. system does), yet (unlike the U.S. system) does not make transfers dependent on the number of children.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.publisher Blackwell
dc.rights ©The definitive version is available at www.blackwell-synergy.com
dc.title Why is the rate of single-parenthood lower in Canada than in the U.S.? A dynamic equilibrium analysis of welfare policies
dc.type article
dc.type.review PeerReviewed
dc.description.status Publicado
dc.relation.publisherversion http://www3.interscience.wiley.com/cgi-bin/fulltext/121666551/PDFSTART
dc.relation.publisherversion http://dx.doi.org/10.1111/j.1540-5982.2008.01499.x
dc.subject.eciencia Economía
dc.identifier.doi 10.1111/j.1540-5982.2008.01499.x
dc.rights.accessRights openAccess
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