Three essays on unemployment and social assistance

This thesis is comprised of three essays concerning unemployment and social assistance. The first essay examines the impact of health status on the duration of unemployment spells and finds that individuals with impaired health will have significantly longer unemployment spells. These longer unemployment spells will result in the stock of the unemployed being composed of a larger proportion of individuals with impaired health than the stock of the employed. Hence, it may not be appropriate to interpret the difference between the mortality rates of the unemployed and employed as a health consequence of unemployment as some studies have done. The second essay examines the duration of welfare and off-welfare spells for lone mothers in Ontario from 1990 to 1994. We find that there is significant variation in the distribution of the spell lengths. Personal characteristics, such as the number and age of children, and policy parameters, such as welfare benefit levels, have significant impacts on the duration of spells. We also find evidence of negative duration dependence, that is, the probability of leaving the state decreases as the spell lengthens. However, for welfare spells, the evidence for negative duration dependence is weakest in our most preferred specification. The third essay examines the dramatic increase in the welfare participation rate in Ontario from 1983 to 1994. We are interested in what role benefit levels, minimum wage levels, the labour market conditions, and the UI system played in the rise. We focus on four family types; lone mothers, single males, single females, and couples with children. Our results indicate that there is significant difference in how the welfare participation rate of each family type changes in response to the four factors we are interested in exploring. Also, we are unable to explain the dramatic increase using these four factors which indicates that other factors were contributed to the increase.