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Rising female employment has been a defining feature of all contemporary labour markets, and single mothers have been no exception to this trend. Since the beginning of the 1980s, employment rates of single mothers have risen by 12 percentage points in Canada and by 13 percentage points in the United States. Earnings of all single mothers (including those with zero earnings) were up by almost 40% in both countries. Indeed, apart from initial differences in employment levels (U.S. single mothers have always been more likely to be employed), trends in employment and earnings might suggest Canadian and U.S. single mothers are two samples drawn from the same population (Panel 2, Table 1). Moreover, the decline in single-mother poverty rates in the United States in the latter part of the 1990s was paralleled by a similar decline in Canada. These broad similarities in outcomes suggest that they may have been driven by much the same forces. But were they?
There are two broad reasons for long-term trends in mothers' employment. First, major socio- cultural shifts, changes in labour demand, and government policies aimed at encouraging women's employment have transformed the labour market behaviour of women with otherwise similar family and labour market characteristics. Mothers with small children, for example, are much more likely to remain in, or return to, employment and women of all ages and education levels are more likely to be employed than in the past. Governments have also intervened to change the labour market behaviour of single mothers. The Earned Income Tax Credit in the United States and the National Child Benefit in Canada were designed to encourage work by providing an earnings subsidy to mothers with low earnings. And in both countries 'welfare-to-work' and other legislative changes were adopted to discourage receipt of social assistance. In the United States, The 1996 Personal Responsibility Act, which imposed time limits and work requirements on welfare mothers, was emulated in similar, albeit more modest, reforms in several Canadian provinces during the 1990s and the province of Quebec introduced dramatic increases in child care subsidies.2
Of importance, however, is that the socio-demographic characteristics of mothers and their families that condition their labour force participation and earnings have also changed dramatically. Today's mothers, including single mothers, are much better educated, considerably older and have fewer children than in the past. In 1980, the population of single mothers was made up predominantly of cohorts born before 1950. During the 1980s and 1990s, they were replaced by the baby boom cohorts born in the 1950s and 1960s, women with much higher levels of education and labour force attachment. During the 1990s, these changes were amplified by the aging of the baby boom in two ways. First, the baby boom cohorts began entering their forties, an age when both employment and earnings tend to be higher. As a result, the share of all single mothers over forty rose while the share of single mothers under thirty declined. Second, as the baby boom mothers aged, their educational profile improved substantially, reflecting the tendency of early births to occur among less educated women and a greater likelihood of divorce and separation happening among more educated women.
In the United States, research on the increase in labour force participation and declining welfare caseloads among single mothers has focused mainly on the relative contribution of the 1996 welfare reforms on the one hand and economic recovery of the late 1990s on the other (Blank 2002). While several U.S. studies include educational attainment as a 'control variable' in their models (e.g., Eissa and Liebman 1996; Meyer and Rosenbaum 2001; Grogger 2003), there has been relatively little emphasis in the United States on the link between demographic change and the increased economic well-being of single mothers. In her comprehensive review of the welfare reform literature, Blank (2002) does not report any studies that cite rising levels of educational attainment as a potential explanatory factor. Fang and Keane (2004) note that education levels among single mothers have risen dramatically since the 1970s but dismiss the potential impact of such changes, arguing that most of the gains occurred before 1996 and therefore could not account for recent changes. Early Canadian work by Dooley (1994) also concludes that changes in the socio-demographic characteristics that condition employment accounted for only a modest share of employment gains among Canadian single and married mothers over the 1973-to-1988 period.
Our aim in this paper is to isolate the 'demographic' contribution to changes in the labour market outcomes of single mothers in Canada and the United States during the 1980s and 1990s. Our analysis is based on three comparable census years (see Table 1) at roughly similar stages in the business cycle. We find that changes in labour force participation and earnings among single mothers were driven by rather different processes. In Canada, changes in employment and earnings over the two decades were mainly due to changes in the socio-demographic composition of single mothers, i.e., to 'demography.' In the United States, in contrast, changes in the labour market behaviour of single mothers with otherwise identical characteristics were the major factor.
National differences in the demographic composition of single mothers, however, help to explain the differences in the relative importance of demographic effects in the two countries. In both countries, changes in socio-demographic composition account for most of the change among older (40 and over) single mothers, while changes in behaviour were the main source of employment gains among younger mothers. Since Canadian single mothers are significantly older than their U.S. counterparts, and behavioural change among younger mothers was much less in Canada than in the United States, demographic effects dominate the Canadian but not the U.S. trends. Employment and earnings gains for older single mothers were driven mainly by changes in their educational attainment and other socio-demographic characteristics and occurred mainly in the 1980s well before the welfare reforms of the 1990s. In contrast, among younger single mothers, employment gains in both countries occurred mainly in the 1990s and changes in behaviour, not demography, were the main reason; these results are consistent with the conclusion that employment gains for single mothers under 40 were social policy induced.3 Moreover, behavioural effects were much larger in the United States than in Canada. Net of demographic effects, employment among young U.S. single mothers rose by over 10 percentage points during the 1990s compared with 4 percentage points in Canada.
As taken up in the conclusion, these differences in behavioural changes among younger single mothers are also consistent with national differences in the magnitude and type of change in the income support system for single mothers over the 1990s.
. This comparative Canada–United States
study builds on a previous study of Canadian single mothers
reported in Myles, Hou, Picot and Myers (2007).
2. For example, in Ontario, social assistance benefits for single parents were cut by 21% and single parents were required to participate in mandatory work-first programs that focused on rapidly attaching participants to the labour market, although exceptions were made for single parents with pre-school children (McMullin, Davies and Cassidy 2002).
3. We use the term 'consistent with' since our analytical strategy does not allow us to isolate the net effect of social policy changes versus other unmeasured variables that could account for changes in labour market behaviour.
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