On poverty among families with children, Quebec and the rest of Canada have taken different paths

Recent issues of Inroads have featured an ongoing debate about Quebec’s exceptionalism when it comes to fighting poverty and inequality. Pierre Fortin¹ has shown that poverty rates and inequality of disposable household incomes (after tax and transfers) are significantly lower in Quebec than elsewhere in Canada, and even compare favourably to those in Europe’s generous welfare states. The subsequent debate has focused primarily on the political and economic sustainability of Quebec’s exceptional position.² Contributors have also noted in passing that the changing composition of families and labour markets is an important factor in accounting for the outcomes observed, and that Quebec in particular has made major efforts to support families with children.³ Here we take a closer look at the effect of Quebec’s policies to combat poverty among families with children on poverty rates of different family types.

As in other advanced societies, family structure in Quebec has undergone rapid change over the past several decades, in particular with the rise of two-earner and single-parent families. Single-parent families, mostly headed by women, have posed new challenges to welfare states as such families are disproportionately prone to poverty. One major distinguishing feature of the different “welfare regimes” famously identified by Danish sociologist Gøsta Esping-Andersen is their distinctive approaches to families and the labour force participation of mothers.⁴ These differences are likely to have a major impact on the extent to which the different regimes are able to meet the challenges posed by the growing differentiation of family types.

As we have shown elsewhere,⁵ while Quebec’s social policies are more generous than those of the other major Canadian provinces across the board, what really sets the province apart is its much greater emphasis on poverty-combating policies aimed specifically at families with children. These policies include the much-touted subsidized daycare system and extended parental leave program, both of which enable mothers of young children to remain attached to the labour force more easily, along with provincial family allowances and the massive child assistance refundable tax credit which in 2005 replaced several preexisting programs supporting families with children. Together these policies constitute a concerted strategy to combat poverty among families with children.⁶

So how does Quebec stack up against the other Canadian provinces and other countries when it comes to poverty rates among different types of families? We look at two measures of poverty. The conventional measure used in the comparative literature is relative poverty: poverty defined as income below a certain percentage of the median. The most often used measure is disposable household income (after taxes and transfers), controlled for family size, of 50 per cent of the median income or less. We will refer to this as standard poverty. In addition to this we will look at household incomes below 30 per cent of the median, which we refer to as acute poverty. This measure can be seen as an indicator of the depth of poverty, which can, in principle, vary independently of the overall standard rate.

To assess the effect of Quebec’s family-oriented antipoverty strategy, we focus here specifically on poverty rates for families with children – both two-parent and single-parent families. As noted, single-parent families are a source of major concern for policymakers: they are far more vulnerable to the threat of poverty than two-parent families, in which one parent may be able to compensate for the effect of a loss of income by the other.

In view of the ongoing debate about Quebec’s “exceptionalism,” we are first of all interested in assessing the extent to which Quebec has succeeded in reducing poverty among families with children in comparison with the other major Canadian provinces: Alberta, British Columbia and Ontario. In the comparative literature on welfare states, Canada is invariably treated as one homogeneous system, usually classified as a “liberal” or “market-oriented” welfare state together with most other Anglo-Saxon countries. However, the marked differences between Quebec and the other Canadian provinces raise questions about this taken-for-granted classification. Therefore, we also compare Quebec with some countries representative of other welfare regime types to gauge how far Quebec has veered from the “liberal” model. For this purpose we have decided to include four European countries in our comparisons: Sweden, the Netherlands, France and the United Kingdom. These choices require a bit of explanation.

Esping-Andersen’s original classification of welfare state regimes identified three ideal types: the “liberal” regimes characteristic of the Anglo-Saxon countries, the “conservative” regimes found mainly on the European continent and the “social democratic” regimes of the Nordic countries. The liberal regimes are the least generous of the lot, with a strong emphasis on reliance on market income and only residual welfare state support for the very neediest. These regimes make little or no effort to help parents (mainly mothers) reconcile work and childcare responsibilities and provide minimal support for families with children. Poverty rates are higher in countries with liberal regimes than elsewhere.

At the other extreme are the social democratic countries. Not only are their social policies among the most generous (though several of the major continental countries now rival or exceed them in overall social spending), but they have also from very early on followed a coherent set of policies intended to facilitate the combination of market employment and family care for all family types.

The conservative countries, finally, have been characterized, at least until very recently, by the exact opposite approach: a set of often quite generous social policies which, however, are designed to support the traditional single-earner, two-parent family. This regime, characteristic of the Netherlands and Germany and, until recently, France and Belgium, tends to discourage the full-time employment of women with children. In recent years, however, Belgium and France have developed a new variant, sometimes referred to as an “optional model,” which seeks to support both the traditional family and full-time employment by mothers who wish or need it.

In our comparisons below, the Netherlands represents the “traditional” conservative welfare state regime, France the conservative regime with the “optional” approach, Sweden serves as the social democratic champion and the U.K. represents the liberal regime type. Given the differences in policy approaches between them, poverty outcomes for different family types would be expected to vary considerably among these countries. At first glance, one would expect overall poverty rates to be highest in the liberal jurisdictions, lowest in the social democratic countries and somewhere in between in the others. By contrast, while the gap between the poverty rates of single-parent and two-parent families might be expected to be lowest in the social democratic countries, it may also be relatively low (though at a higher overall level of poverty) in the liberal countries, while one would expect it to be highest in the traditional conservative countries and perhaps moderate to low in those with the optional model. It will be interesting to see where Quebec fits in all of this.

We use data from the Luxembourg Income Study (LIS), the current gold standard for international income comparisons, offering more than 200 demographic and income variables from more than 30 countries.⁷ The data are presented for five-year intervals starting in 1990 up until the latest year with fully available data (2004–05). This substantially coincides with the period in which Quebec introduced most of its distinctive new poverty fighting programs. For the purpose of identifying families with children, we adopt the conventional “demographic” definition: two cohabiting adults with children under the age of 18 are defined as a two-parent family, and a single adult living with one or more of his or her children under 18 constitutes a single-parent family. As recommended for measures of poverty, we use the LIS equivalence scale to standardize for family size by dividing disposable income by the square root of family size.

Has Quebec become like Sweden?

In figure 1 we show standard poverty rates, that is the proportion of families with disposable, family-size adjusted incomes of 50 per cent or less of the median family income, for two-parent and single-parent families for the most recent years for which data are available. As expected, social democratic Sweden does better than any other jurisdiction in terms of poverty rates for both family types. Also, the gap between single- and two-parent families is large everywhere. Even in Sweden single-parent families are four times more likely to be poor than two-parent families.

But then there are some surprises. For one thing, there appears to be little difference between the liberal and the conservative regimes’ poverty rates for two-parent families, except for Quebec which has a two-parent poverty rate as low as that of social democratic Sweden. Less surprisingly, the single-parent family poverty rates more or less⁸ reflect the welfare regime logic: liberal regimes have the highest rates by far with the conservative regimes falling somewhere in between them and social democratic Sweden. Here Canada does very badly indeed, with a single-parent family poverty rate considerably higher than even the liberal U.K. But this poor showing is exclusively the result of the high poverty rates outside Quebec, as Quebec’s single-parent poverty rate is considerably lower – on a par with France’s. In sum, Quebec’s standard poverty rates place it somewhere between the social democratic and conservative regimes, while the rest of Canada is firmly located on the liberal extreme of the spectrum. In this respect, at least, Quebec definitely is a “distinct society.”

But it was not always so. In figures 2 and 3, we present the evolution of standard poverty rates for single-parent and two-parent families respectively for the period from 1990 to 2004. Figure 2 shows that in the early 1990s Quebec’s single-parent family poverty rate was almost exactly at the Canadian average. Until 2000, the Quebec pattern followed that of the rest of Canada, which showed about a ten-percentage-point decline in the poverty rate. But after that, the rates in the rest of Canada increased sharply, while Quebec’s continued to decline gently. In other words, in the course of the period covered, which is precisely the period in which Quebec started to go its own way in its approach to poverty reduction, its rates moved from the liberal to something between the conservative and social democratic levels.

The pattern for two-parent families is in some respects even more pronounced. As figure 3 shows, in 1990 Quebec’s two-parent family poverty rate was virtually indistinguishable from the British Columbia and Ontario rates, and only slightly lower than the Canadian average. But while these rates soared to the highest levels in the figure in the other provinces, the Quebec rate hardly changed until the year 2000, after which it declined steeply as it did in the rest of Canada. The end result is that by 2004, Quebec’s rate was as low as that of social democratic Sweden and far lower than that of any other country or province in the figure.

It would seem, then, that while Quebec was no doubt affected by the same general economic trends as the other provinces, as well as by Canada’s federal policies and changes in those policies during this period, its pursuit of a separate social agenda has enabled it to follow quite a different trajectory with respect to reducing poverty among Quebec families, though more so for two-parent than for single-parent families.

By some standards, the depth of poverty is a better measure of a welfare state’s performance in combating poverty than the poverty rate. In principle, for one and the same poverty rate, the poor could all be bunched together close to the poverty threshold of 50 per cent of the median income, they could be evenly distributed from those with zero income to those close to the threshold, or – far more seriously – they could be concentrated at the very bottom of the income scale.

As a measure of the depth of poverty, we calculate the acute poverty rate as the proportion of families with an income of 30 per cent of the median or less.⁹ Figures 4 and 5 present these rates for our two family types. Figure 4 shows that in 1990, Quebec’s acute poverty rate for families headed by a single parent was lower than rates in the rest of Canada, but higher than the rate in any of the European countries. But Quebec is the only jurisdiction in the figure that experienced a sustained decline over the entire period, dropping from close to 8 per cent in 1990 to 1.5 per cent in 2004. At that point, Quebec seems to have virtually eradicated acute poverty even among single-parent families, with an acute poverty rate significantly lower than any of the others reported here. By contrast, somewhere between 10 and almost 16 per cent of single-parent families in the rest of Canada lived in acute poverty in 2004, which is between twice and three times the rate in the other countries. Clearly, acute poverty among single-parent families remains an extremely serious problem in the rest of Canada

When it comes to two-parent families, Quebec has done even better, as can be seen from figure 5. In 1990 the rate of acute poverty among Quebec’s two-parent families was already lower than all but Sweden’s, but after a further decline it reached 0.2 per cent in 2004, the lowest rate in any of the countries and provinces we are comparing here. But note that the rest of Canada has also done relatively well in reducing acute poverty among two-parent families during this period, with even Alberta’s rate ending up below those of the U.K. and the Netherlands.

In short, during the period in which its major and distinctive antipoverty programs were implemented, Quebec appears to have succeeded in virtually eradicating acute poverty for both single- and two-parent families, doing better than even Sweden has in this respect. While the rest of Canada has done relatively well with respect to acute poverty among two-parent families, it has done very badly indeed for single-parent families. As a result, the gap between the two family types is extreme: single-parent families in Canada outside Quebec are roughly ten times more likely to end up in acute poverty than two-parent families. Put differently, outside Quebec acute poverty is to a very large extent a single-parent family phenomenon. This presumably reflects the fact that there are few if any programs and policies that specifically address the problems facing such families; as a result, families are more dependent on market income there than in the more generous welfare states of Europe and Quebec.

A social democratic enclave

So Quebec really is different – or, more accurately, it has become different over the past two decades. During a period when rising inequality of market earnings and stagnant transfer payments have produced increased inequality in disposable incomes elsewhere in Canada,¹⁰ Quebec has managed to reduce poverty rates substantially – primarily, it seems, through a combination of policies benefiting families with children.

Granted, we have no direct evidence of the effect of these policies on poverty rates, but the circumstantial evidence is quite strong. It is during the period under consideration that Quebec introduced its major new social programs and increased its spending on them dramatically, while such spending remained flat or declined in the rest of Canada.¹¹ It is also during this same period that Quebec’s poverty rates began to decline steadily. One major mechanism that may be responsible for this is the promotion of the labour force participation of women with young children through the introduction of subsidized daycare and relatively generous parental leaves. In effect, while Quebec’s female labour force participation rate remains modest compared to the other major provinces, its participation rate for women with young children has soared far above theirs since the mid-1990s.¹²

Finally, Quebec’s social taxes and transfers also reduce poverty among childless households to a greater extent than in the other provinces, but the post-tax-and-transfer poverty rate among them is not much lower in Quebec than elsewhere.¹³ All this suggests, it seems to us, that Quebec’s relative success in fighting poverty is indeed primarily the result of what John Myles has described as its “more aggressive approach to family well-being.”¹⁴

So where does Quebec stand now in relation to the different “welfare state regimes”? At the beginning of the period we have considered, there was little to distinguish Quebec from the rest of Canada, at least in terms of poverty rates. In 1990 Quebec’s rates, particularly for single-parent families, were pretty much as dismal as they were in the other liberal regimes. But by the end of the period things had changed dramatically. Quebec’s standard and acute poverty rates are now as low those of social democratic Sweden, or even lower.

The standard poverty rate for single-parent families is an important exception, but even in that respect Quebec’s performance compares reasonably well with the reputedly more generous European conservative welfare states. Note also that Quebec has accomplished all this with a combination of greater generosity in its social programs and an approach intended to facilitate combining market employment and childcare for women with children, a typically social democratic strategy. In other words, with respect to the policies and outcomes we have considered here, Quebec seems to have effectively moved from a typical liberal welfare state to what looks an awful lot like a social democratic one.

No doubt caveats of various sorts are in order. We have not taken up the issue of the sustainability of this “social democratic” enclave in a seemingly ever more “liberal” North American continent – an issue that has been vigorously debated elsewhere in the pages of this journal. And Quebec still faces a serious single-parent family poverty problem, with considerably higher than social democratic standard poverty rates. In general, our analysis confirms that single-parent families remain exceedingly vulnerable to the threat of poverty everywhere and to acute poverty in most jurisdictions other than Quebec and Sweden.

But the fact remains that Quebec appears to have come a long way from its erstwhile liberal policy regime. The other provinces in Canada, and possibly even some of the other European countries, could do worse than to investigate exactly how Quebec was able to pull this off.

Notes

¹ Pierre Fortin, “Quebec is Fairer: There is Less Poverty and Less Inequality in Quebec,” Inroads, Winter/Spring 2010, pp. 58–65.

² See François Vaillancourt and Mathieu Laberge, “Quebec: Equitable Yes, Sustainable No,” Inroads, Winter/Spring 2010, pp. 74–83; Pierre Fortin, “A Canadian Problem, Not a Quebec One: A Response to François Vaillancourt and Mathieu Laberge,” Inroads, Summer/Fall 2010, pp. 23–27.

³ See particularly John Myles, “The Inequality Surge,” Inroads, Winter/Spring 2010, pp. 66–73.

⁴ Gøsta Esping-Andersen, The Three Worlds of Welfare Capitalism (Cambridge, U.K.: Polity Press, 1990).

⁵ Christine Proulx, Samuel Faustmann, Hicham Raïq and Axel van den Berg, “Internal Diversity in Social Policy Regimes: The Case of Canada’s Four Major Provinces,” in Guy Fréchet, Danielle Gavreau and Jean Poirier, eds., Social Statistics, Poverty and Social Exclusion: Perspectives from Quebec, Canada and Abroad (Montreal: Presses de l’Université de Montréal, 2011), pp. 176–89.

⁶See also Luc Godbout and Suzie St-Cerny, Le Québec, un paradis pour les familles?: regards sur la famille et la fiscalité (Quebec City, QC: Presses de l’Universite Laval, 2008).

⁷ See www.lisproject.org

⁸ We note in passing that the patterns for France and the Netherlands are the exact opposite of what one would expect from the welfare regime literature. The “traditional” Netherlands does significantly better than France with respect to single-parent families but slightly worse for two-parent families.

⁹ The cutoff is somewhat arbitrary, of course, but after some experimentation with other cutoffs (25, 35 and 40 per cent of the median), we opted for 30 per cent of the median as this threshold is low enough to generate meaningful contrasts while not so low as to limit the analysis to extremely problematic cases that no public policies have been able to address successfully anywhere.

¹⁰ See Myles, “Inequality Surge.”

¹¹ Proulx et al. “Internal Diversity in Social Policy Regimes.”

¹² Ibid., pp. 177–78.

¹³ Ibid., p. 174.

¹⁴ Myles, “Inequality Surge,” p. 67.

 

Hicham Raïq is a PhD candidate in the Sociology Department at the Université de Montréal. His research interests include social inequality, health inequality and the labour market, using complex survey data.

Paul Bernard was Professor of Sociology at the Université de Montréal until his death in February 2011.