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Did Canadian Welfare Reform Work? The Effects of New Reform Strategies on Social Assistance Participation

This paper measures the extent to which declines in social assistance (SA) participation were associated with novel and aggressive reforms referred to as new reform strategies: work requirements, diversion, earning exemptions and time limits. Controlling for province-specific benefit levels, eligibility requirements, GDP growth, labour market conditions and demographics, SA participation rates were more than one percentage point lower (equivalent to a 13% decline) in provinces with new reforms. Work requirements with strong sanctions had the sharpest negative associations. New reform strategies explain at least 10% of observed declines in SA participation, twice that of benefit levels and eligibility requirements.