|
Reducing Lone-Parent Poverty: A Canadian Success Story, by John Richards. Released June 2010 in the C. D. Howe Institute Commentary no. 305.
From 1996 to 2007, the poverty rate among Canadian lone-parent families dropped by more than half—from 50 per cent to 20 per cent.
John Richards attributes this amazing success to an increase in employment, and hence income, in these families. He asks the question: what did federal and provincial social policy get right? His analysis points to first, the adoption of more restricted access to social assistance (welfare-to-work) for employable persons by provincial governments in the mid-90s, and, second, initiatives, particularly the National Child Benefit (NCB), that increased support for low-income families. He also concludes that Canada’s economic prosperity during the reference years contributed to the decrease in poverty in lone-parent families, but to a lesser degree than social policy changes.
Richards also discusses several reasons governments should pursue welfare-to-work policies, including: independence from regulations involved with government transfers; the role model effect of working parents on children; potential reduction in the incidence of lifestyle diseases; and potential reduction in rates of depression and suicide.
However, although lone-parent poverty rates declined, “the trends in overall poverty are less optimistic.” Richards notes that the change in this was “unexceptional in international terms” from 1976 to 2007 and that Canada’s poverty rate remains “well above” the OECD average.
Richards concludes with the observation that the further effectiveness of welfare-to-work policies to reduce poverty is limited. Governments will need to adopt complex policies that deal with the challenges presented by people with disabilities or addictions, the homeless or the poorly educated. In this section Richards shows an understanding that poverty is the result of multiple factors, and that there is no single solution.
Unfortunately, the rest of Richards’ analysis has limitations He looks at policy changes and the effect of economic prosperity on poverty, but he does not look at the demographic characteristics of lone-parent families. The Statistics Canada report “Education and income of lone parents” (Diane Galarneau, Perspectives in Labour and Income, December 2005, vol. 6, no. 12) notes that between 1981 and 2001, female lone-parent families (the majority of these families are headed by women) decreased in size, and in 2001, female lone parents were generally older, better educated and earned more than in 1981. These trends may have continued through to 2007
And, while he points out the social benefits of welfare-to-work programs, these are difficult to measure, demonstrate success in and trace to one or two policies. They also seem tangential to the benefit many governments were pursuing—reducing costs.
In discussing the NCB, Richards notes that it acted as a negative tax system, with a threshold for clawing back social assistance payments set above $20,000 in family income. Provinces reduced welfare payments to offset the NCB payments. The system allowed families to exit welfare programs at lower income levels. However, to this reader, this sounds like a transfer of responsibility for income assistance to the federal government. The number of people on welfare rolls would go down, but would poverty levels?
Richards’ start point for his analysis is also interesting. 1996 was the peak year for overall poverty and female lone-parent poverty in Canada. The female lone-parent poverty rate in 1996 was 56.0%; in 1995 it was 50.6% and in 1997, 51.2 % (Statistics Canada, Persons in Low Income After Tax, Summary Tables). Start and end points can make a significant difference in results and need to be carefully chosen and explained.
Richards himself acknowledges that the overall poverty rate has changed little. So, there was a substantial decrease in the proportion of poor lone-parent families in our population, but not in the proportion of poor. Why?
Richards ends, in an appendix, by introducing a question that deserves public discussion—how to best measure poverty. Existing measures include: 1) Low Income Cutoff (LICO) thresholds—the income, adjusted for family size and community, at which a household spends 20 percentage points more of their after-tax income on necessities than the average household; 2) the Low Income Measure (LIM) thresholds—half the median after-tax income, adjusted for family size; and 3) the Market Basket Measure (MBM)—the cost of a list of essentials for a family of four. Each measure has merits and disadvantages, which Richards explores. He makes his preference clear—the LIM with adjustments to reflect regional price differences. A reader may or may not agree with this preference, but Richards’ analysis is thoughtful. Discussion would help clarify what Canadians view as poverty, which would inform and guide social policy choices by government—and a definition of success in poverty reduction.
Review by Janet Harding
|
Sunday, 05 February 2012 
