Labour Market Matters - December 2013

The Universal Child Care Benefit (UCCB) represents one of the largest transfer programs administered by the Canadian government, representing 4.5 percent of federal transfers to individuals. The UCCB – which provides $100 monthly to parents for every child under six years of age – was brought into force in 2006. At a time of increasing government austerity, some have begun to question the relative value of UCCB. The UCCB program is sizable – representing roughly 12-18 percent of the annual government spending on child benefits. A study entitled “The Effect of Universal Child Benefits on Labour Supply†(CLSRN Working Paper no. 125) by CLSRN affiliate Tammy Schirle (Wilfrid Laurier University) finds that the UCCB program actually has significant negative effect on labour supply for families that receive the benefit. Individuals with disabilities face greater challenges in the labour market than able-bodied individuals and a growing body of research is finding that their children also tend to have more developmental problem than the children of able-bodied parents. Can transfer payments help reduce this gap? In Canada, disability benefits are primarily provided by provincial governments. As each provincial government has its own rules and benefit levels, which have changed by different amounts at different times, there is considerable variation in the disability benefit levels per province. A paper entitled “Intergenerational Effects of Disability Benefits – Evidence from Canadian Social Assistance Programs†(CLSRN Working Paper no. 122) by CLSRN affiliates Kelly Chen (Digonex Technologies Inc.), Lars Osberg (Dalhousie University), and Shelley Phipps (Dalhousie University) finds that the achievement gap between children of disabled and children of non-disabled parents is smaller in provinces where disability benefits are higher.