Family Matters: New Policies for Divorce, Lone Mothers, and Child Povertyby Martin D. Dooley; Ross Finnie; Shelley A. Phipps; Nancy Naylor

Canadian Public Policy

Family Matters: New Policies for Divorce, Lone Mothers, and Child Poverty by Martin D.Dooley; Ross Finnie; Shelley A. Phipps; Nancy NaylorReview by: G. N. RamuCanadian Public Policy / Analyse de Politiques, Vol. 22, No. 3 (Sep., 1996), pp. 308-310Published by: University of Toronto Press on behalf of Canadian Public PolicyStable URL: http://www.jstor.org/stable/3551514 .

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308 Reviews/Comptes rendus

Boothe finds that Alberta's fiscal history has been

shaped by three factors: a need to construct infrastructure to develop the province; the reliance of the

provincial economy, and consequently government revenue, on primary products, including oil; and difficult relations with the federal government, par- ticularly in regard to natural resources. Two perceptions that found little support in the data were the

perceptions that government spending is strongly influenced by the electoral cycle and the perception that precedence among ministers is a significant determinant of spending.

From his study Boothe concludes that the primary determinant of spending by the Alberta government was public demand for government-provided goods and services, tempered by political variables. Gov- ernment response to this demand has produced a

steady increase in government spending. The key implication of Boothe's finding is that spending control must include influencing the public's demand for government services. This requires break-

ing with the past trend of steady growth of government spending and encouraging public acceptance of a lower level of government services. Boothe re- fers to Premier Ralph Klein's experiment of radical

expenditure reduction, but faced with revenue con- straints and budget deficits, other provincial governments along with the federal government have also embarked on similar programs of curbing ex-

penditures and attempting to find alternative means for the provision of services. This has not been an

easy task and has produced protests and unrest

among various elements of society. As Boothe's fiscal history of Alberta illustrates, in the past the government responded to economic and social problems by becoming an ever larger presence in the construc- tion of infrastructure and the provision of expanded and improved services. This has been true of governments at all levels in Canada and the public has come to expect this of government.

Boothe has provided a better understanding of the forces that shaped Alberta government expendi- tures and a methodology for research on government

spending. The implication of his findings for spending control would appear to apply to all governments in Canada that are attempting to change their ex-

penditure behaviour.

JOHN C. STRICK, Department of Economics, Univer-

sity of Windsor

Family Matters: New Policies for Divorce, Lone

Mothers, and Child Poverty by Martin D. Dooley, Ross Finnie, Shelley A. Phipps and Nancy Naylor. Toronto: C.D. Howe Institute, 1995. Pp. Vii, 290. $16.95.

Family Matters, the eighth report in the C.D. Howe Institute's The Social Policy Challenge series, deals with such difficult issues as single mothers and divorce and child poverty in Canada, which many be- lieve not only destabilize families, but also put an enormous burden on the financial resources of so-

ciety. To their credit, the four economists who are the main contributors to this work have treated these matters in a rigorous way, even though they differ in their ideological and analytical approaches. William Watson provides a cogent introduction to these essays and Douglas Allen critiques them in the concluding chapter.

In an informative discussion, Martin Dooley uses data from Statistics Canada's Annual Survey of Con- sumer Finances for the periods of 1973-75, 1979- 82, and 1990-91 to contradict many stereotypes about single mothers in Canada. He shows, for ex-

ample, that they are not a homogeneous group: they differ in age, income, number of children, as well as the extent of their dependence on social assistance. Moreover, the percentage of lone mothers de-

pendent upon welfare has not increased. In fact, the fraction of older women (i.e., those over 35 years) on social assistance has declined slightly in the last 20 years. Only about 25 percent of those who are on social assistance are single mothers. Neverthe- less, about 40 percent of single mothers under the age of 35 years are on welfare because of the tight labour market, social assistance policies, and

CANADIAN PUBLIC POLICY - ANALYSE DE POLITIQUES, VOL. XXII, NO. 3 1996



Reviews/Comptes rendus 309

personal circumstances (e.g., number of children, marketable skills).

In Dooley's view, strategies such as financial in- centives to get single mothers off welfare rolls or assistance to improve employment opportunities (training, daycare, etc.), or measures such as man-

datory employment will not work in the long run. He recommends an increase in child support payments, but without any empirical evidence or con- sideration of the impact such a policy would have on men (especially those who remarry and have new

family obligations). Dooley has not dealt with this matter in a systematic fashion.

Ever since Lenore Weitzman's study of the economic consequences of divorce for women in Cali- fornia was published (The Divorce Revolution, 1985), there have been numerous other investiga- tions of this topic, but few in Canada. Ross Finnie's

piece, "Economics of Divorce," fills this gap. Us-

ing data from the Longitudinal Administrative Da- tabase for the years 1982 to 1986, Finnie concludes that women do very poorly after divorce and that

men, after initial losses, are better off over the years. In addition to decreased income, women suffer a decrease in "economic well-being" which is calcu- lated on the basis of income-to-needs ratio (p. 121). For instance, the economic well-being for men im-

proves by 6 percent in the first year. By contrast, economic well-being for women in the first year declines to 60 percent of what it was prior to divorce although it rises to 70 percent in the third year.

After discussing the reasons for income varia-

tions, Finnie proposes a set of policies that might alleviate the post-divorce situation for women. Three

points are worth noting here. First, he recommends child support guidelines that set awards according to a fixed percentage of the non-custodial parent's gross income on a per-child basis (e.g., first child, 17.7 percent, third child 39.1 percent, and fifth child 51.7 percent), with the amounts deductible at source. Second, he convincingly argues for maintaining the existing rules on child-support tax payments (non-

custodial tax deductions) because changes could lead to a decline in custodial families' net income.

Finally, he suggests that in order to minimize per- ceived injustices and bitterness about child and

spousal support, couples write contracts before mar-

riage and before the birth of a child stipulating the terms of settlement in the event of divorce. Although all three recommendations appear feasible, the last one is impractical given the conditions under which

people enter marriage, for example, the initial eupho- ria and expectations of success. Moreover, even if pre- nuptial and pre-parenthood contracts were used by cou-

ples, their legal status might be questionable if matri- monial property regimes were ruled to take precedence.

In the third essay, Shelley Phipps proposes a re-

placement of the current child benefit program which provides low-income families with refund- able tax credits and all mothers with generous cash allowances. (The recommended amounts range from

$1,000 to $1,500 per child, per annum.) While the

principle of universality entitles every mother to child allowances, those in the higher tax brackets would pay more. Given that approximately 18 percent of all Canadian families with children and 58

percent of single mothers live in poverty, Canada is not doing as well as many industrialized countries such as Sweden and Germany in reducing child poverty. Phipps maintains that since "children are our most precious resource" it is imperative that we in- vest in their future so that they can become law-

abiding, educated, and skilled citizens. Put simply, she argues that higher family allowances will sig- nificantly lower child poverty in Canada. I disagree with her recommendation because the overall welfare of children cannot be improved simply by giv- ing mothers an extra $100 which, in many instances, may not be directly spent on children. Unless there are measures to ensure that each family gets adequate income either through employment or through other

measures, children will share the poverty of the families they are born into. If Sweden or Germany are do-

ing better than Canada in this regard, we must look for other social programs directed at families in these countries and not just child benefits.




310 Reviews/Comptes rendus

Finally, Nancy Taylor, in her proposal for a Na- tional Child Benefit Programme, points to certain

philosophical and administrative problems with the

existing programs. After reviewing three possible programs that might improve child benefits, Naylor proposes her own model. Specifically, her plan con- solidates provincial and federal programs and ex-

pands them in such a way that the low-income families receive between $2,400 and $3,000 annually. The annual cost would be an additional $2 billion (an increase from $5.1 billion to over $7 billion in

1993), not including start-up costs and annual administrative costs. Taylor's recommendations are laudable but unrealistic in the current political and economic climate which stresses "restructuring, reengineering, and downsizing."

Douglas Allen, in his commentary on the four

essays, contends that divorce is destroying the in- stitutions of marriage and the family. I find his ar-

gument simplistic and uninformed. It ignores the fact

that nine out of ten Canadians still marry and, moreover, that a majority stay married to the same

person until death. What he overlooks is that divorce is not an act against the institution of marriage but

against a spouse who fails to fulfil some obligations or violates a promise. I also take issue with his view that no-fault divorce laws are the source of "all ills." In the first place, there is still a "no-fault" divorce

system in Canada comparable to California's. Sec-

ondly, there is no moral or ethical justification for legally coercing spouses to stay in a marriage that is empty and mutually destructive.

Despite my reservations regarding the various positions of the authors, this is a useful book, especially for those of us who are not economists. If and when reprinted, attention should be paid to stylistic and typographical errors.

G.N. RAMU, Department of Sociology, University of Manitoba

.A FIANCEANDREONTRCTO

The Role of Canada's Department of Finance, 1939 - 1946

by David W Slater with two chapters by R.B. Bryce

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Family Matters: New Policies for Divorce, Lone Mothers, and Child Povertyby Martin D. Dooley; Ross Finnie; Shelley A. Phipps; Nancy Naylor