The Demographic Foundations of Rising Employment and Earnings among Single Mothers in Canada and the United States, 1980–2000

Despite comparatively modest welfare reforms in Canada relative to those of the United States, employment rates and earnings among single mothers have risen by virtually identical magnitudes in the two countries since 1980. We show that most of the gains in Canada and a substantial share of the change in the US were the result of the dynamics of cohort replacement and population aging as the large and better educated baby boom generation replaced earlier cohorts and began entering their forties. In both countries, demographic effects were the main factor accounting for higher employment and earnings among older (40+) single mothers. Changes among younger single mothers, in contrast, were mainly the result of changes in labor market behavior and other unmeasured variables. Overall, demographic changes dominated in Canada but not in the US for two reasons: (a) Canadian single mothers are significantly older than their US counterparts; and (b) consistent with the welfare reform thesis, the magnitude of behavioral change among younger single mothers was much larger in the US.