How much poverty can’t the government be blamed for? A counterfactual decomposition of poverty rates among Canada’s largest provinces
Authors: Charles A. Plante and Axel van den Berg
Editors: Danielle Gauvreau, Guy Fréchet, and Jean Poirier
Poverty rates are routinely treated as summary measures of failure of governments in combating social exclusion. Yet gonerment policy is but one of many factors affecting poverty outcomes. In this paper we apply the Oaxaca-Blinder technique to SLID data in order to offer a decomposition of some of the most obvious additional determinants of poverty rates in Canada’s four largest provinces: British Columbia, Alberta, Ontario and Quebec. This paper presents preliminary attempt to answer the question, “What would poverty rates of the other three provinces look like if they had Quebec’s population, and vice versa?” Taking into account compositional differences related to family and employment levels between our four Canadian provinces produces interesting results for how we think about which provinces have been most effective at combating poverty among their citizens. If we control for Quebec’s compositional disadvantage (and/or Alberta’s and Ontario’s compositional advantage), it would appear that over the last ten years Quebec has been much more succesful at reducing its poverty rate than simple poverty statistics would suggest.
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