In July 1998, the National Child Benefit (NCB) provided a new child tax benefit for low-income families which it allowed provinces to integrate with (deduct from) social assistance (SA) payments resulting in increases in the incomes of working poor families but none for social assistance participants. This produced incentives for SA participants with children to increase their labour force attachment. Six provinces integrated the benefit with their social assistance programs, lowering the `welfare wall'; four provinces did not providing interprovincial variation in the program.Evaluation to date is pointing out mixed effects of the program - lone mothers seem to be increasing their labour supply while married mothers are decreasing it. This study examines the effects of the NCB on parental labour supply at both the intensive and extensive margins using the 1998 Canadian Time Use Survey. The survey offers a plethora of information on personal and household characteristics including source of income and hours worked. Although cross-sectional, it offers a provincially representative sample of individuals evenly distributed across the months from February 1998 to January 1999 (5 months prior 7 months post introduction), the interprovincial variation in implementation and pre and post timeframe of the survey enables a difference-in-difference approach, taking into account recent advances estimating standard errors, to examine the impact of the NCB on parental labour force participation.
Preliminary results indicate no short run changes in the labour force participation of male or married female parents, small increases are seen for lone mothers, particularly lone mother families with older children at home.