Lone parent families headed by women are among the most economically vulnerable in Canada, as in several other developed societies. There are more than one million lone parent families in Canada. Over 60 per cent live below the Statistics Canada low income cut-off point, and their average income is only 60 per cent of poverty line income. In contrast to overall poverty the number and proportion of lone parents in poverty have increased over the past two decades. Terrance Hunsley provides an informative and insightful analysis of the key issues related to lone parent incomes and the associated social policy outcomes. He starts with the recognition that policies and schemes put in place in Canada over the past two decades have failed to prevent or alleviate the problems associated with poverty and lone parenthood. While one might question the assertion with respect to alleviation there is little argument about the failure to prevent poverty.
The objectives of Hunsley’s research were to compare the outcomes of policies to reduce child and family poverty in Canada with the policies in nine other OECD countries and evaluate the effectiveness of Canadian policies in helping low-income lone parent families. This analysis is situated within a review of issues relating to lone parenthood including a brief historical survey of policies relating to lone parenthood in Canada and an outline of key aspects of the economic context of social policy in Canada and the reference countries – the United States, the United Kingdom, Australia, France, Germany, the Netherlands, Sweden, Norway and Denmark. The core of the analysis is presented in two chapters, one on the economic status of lone parent families in the reference countries and the other on the income profiles of model lone-parent families.
Using a wide range of sources, including the Luxembourg Income Study database, European Union and Organization of Economic Cooperation and Development data, he demonstrates that lone parent income is less that half that of similar two parent families in Canada, compared to 70 to 85 per cent in Sweden, France and Germany. Furthermore, Canada ranked low on measures showing the effect of tax and transfer policy. While lone parent families were found to have relatively low living standards in all of these countries, the highest poverty rates among such families occur in the four English speaking countries, with Canada having a middle to low rank on all the measures. Lone parent families were found to be better off in the Netherlands, Sweden, Germany and France. These differences were the result of policy choices.
A model family unit approach was used to compare the final financial outcome of social policies in Canada and the other nine countries. The impact of specific policies affecting income, taxes and related subsidies was measured for each of five different types of families. These model families were derived by developing profiles that reflect the situation of low-income lone mothers in Canada. Despite limitations, and the associated need for care in their use, such models provide very important insights into income packaging, the impact of particular policies, and the interaction of policies on the final income of lone parents. While Canada’s lone parent families seem quite high in the ranking of final income, the other countries do more to improve their position relative to other families after taxes and transfers are calculated. The structure of benefits favours informal work of various kinds over formal labour market participation in several countries, particularly in Canada. The high tax applied against extra earnings for social assistance recipients serves as a significant disincentive to employment in Canada. Policy does not encourage lone parents to work part-time and the incentive for full-time work is weak unless they can earn income well above the average for women. Combined with the relatively low educational and occupational qualifications of most lone parents on social assistance, and the wages of the jobs potentially available to them, these facts help to explain increasing dependence on social assistance.
Despite its impact on public expenditure, the shift in Canada from universalism to targeting of programs has not improved the prospects of the poor, at least as reflected in the conditions of lone parents. Furthermore, several countries with higher levels of public spending also have higher levels of economic performance and are more successful in reducing poverty, despite higher levels of pre-transfer poverty and higher old age dependency. In view of these facts, and recognizing the importance of prevention and the potential contribution of the children of lone parents, Hunsley makes several recommendations for Canadian policies for lone parents. These include improvement of public and private child support, including child benefit and employment incentives for lone parents, rent subsides to low-wage workers, support for lone parents in training and education, strategic action to foster initiatives such as care cooperatives, and improved information on programs and entitlements.
This study draws on a wide range of data to address important policy questions. The quantitative data are supplemented by data from seminars involving lone parents from nine of the countries covered in the study. This involvement adds cogency to the policy recommendations. Both types of data are sensitively used and their limitations are recognized.
This study is an important contribution to current policy debates not only in Canada but in several OECD countries. It clearly demonstrates that policies reflect choices, that countries differ in the choices they make and that these have consequences for lone parents and their children.
Julia O'Connor
McMaster University (Hamilton) and
National Economic and Social Council (Dublin)
oconnor@pop.nesc.ie
March 1999
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