WELFARE PARTICIPATION AND LABOR-MARKET BEHAVIOR IN CANADA

In this paper bivariate probit estimation procedures and non-independe nt selectivity adjustments are employed to investigate the determinant s of the joint welfare participation-labour supply decisions made by s ingle males, single females, lone fathers and lone mothers, using data from the 1988-9 LMAS. The bivariate probit results indicate that the welfare and labour force participation decisions are not independent. Welfare program parameters, however, such as the basic allowance and t he program tau rate, generally do not appear to influence the welfare participation, labour force participation or hours worked decisions. R ather, these decisions are more strongly associated with personal char acteristics and labour market conditions.