@TechReport{iza:izadps:dp2266,
            	author={Hansen, Jörgen and Lofstrom, Magnus and Zhang, Xuelin},
            	title={State Dependence in Canadian Welfare Participation},
            	year={2006},
	month={Aug},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={2266},
            	url={https://www.iza.org/publications/dp2266},
	abstract={This paper analyzes transitions into and out-of Social Assistance in Canada. We estimate a dynamic Probit model, controlling for endogenous initial conditions and unobserved heterogeneity, using longitudinal data extracted from the Survey of Labour and Income Dynamics (SLID) for the years 1993-2000. The data indicates that there are substantial provincial differences in social assistance participation. The empirical results indicate that a “welfare trap” does exist in Canada, but the extent of it varies across provinces. The results also suggest that there is a link between provincial variations in structural and spurious state dependence and regional differences in welfare generosity. In particular, the existence of structural state dependence, or a “welfare trap”, appears to be more likely in provinces with relatively high benefit levels. One implication of this result is that a change in the welfare benefit structure is not likely to lower participation as significantly among less generous provinces as more generous ones.},
	keywords={welfare;state dependence;unobserved heterogeneity;initial conditions;transition;Canada},
            }