The main goal of this paper is to analyze the impact of the unemployment in
surance (UI) program on the rates of entry into and exit from welfare by si
ngle-parent households in Quebec. The database we use comes from Quebec wel
fare records and comprises over 11,180 single-parent households, most of wh
ich (92 percent) are headed by a woman. Our results show that tightening th
e conditions of eligibility to UI causes a reduction of exits from welfare,
especially for the older group, and an increase in re-entries. Similarly,
a cut in the UI replacement rate raises the rate of re-entry into welfare.
Our results indicate that cuts in the UI program may partially explain the
increase in the welfare participation of lone mothers observed recently.