Evaluation of the National Child Benefit Initiative: Synthesis Report

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Conclusion

The current evaluation is by no means the “final word” on the analysis of the impact of the NCB Initiative. Nevertheless, it represents an important step in assessing how well the Initiative is working and in providing transparent, results-based accountability by both orders of government.

The current evaluation has examined the NCB Initiative in terms of:

1. The continued relevance of the program and its rationale;
2. The extent to which the Initiative has achieved its objectives over the first three years of its operations; and
3. Examining possible areas where the cost-effectiveness of program design and program co-ordination etc. could be improved.

It is a central conclusion of the current evaluation that there is strong and compelling evidence supporting the rationale for the NCB Initiative. However, while progress has occurred in recent years, about ten percent of Canadian children continue to live in low-income conditions as measured by the Statistics Canada LICO. Based on evaluation results to date, it is clear that the NCB has a role to play in continuing to address this problem.

The Initiative has generally been successful in achieving its stated objectives of:

1. helping to prevent and reduce the incidence and depth of child poverty;
2. promoting attachment to the workforce by ensuring that families are better off working (breaking down the “Welfare Wall”); and
3. reducing overlap and duplication through closer harmonization of program objectives and benefits and through simplified administration.

There is clear evidence that the NCB Initiative has had significant positive impacts in reducing the incidence of families with children living in low-income conditions (Sections 5.1.2 and 5.1.3), and, as well, in reducing the severity of low-income conditions for those families which continue to live below the low-income threshold. This has been achieved, in part, by means of strengthening job attachment and reducing the barriers to work inherent in the "Welfare Wall" (Section 5.2.2) — a problem area which in the past has remained recalcitrant in the face of many governments' attempts to address the issues involved, both in Canada and abroad.

There is evidence of a mixed impact of the NCB Initiative on promoting attachment to the labour market. In most jurisdictions, the design of the NCB Initiative has made work financially more attractive than social assistance for families with children by improving the difference between minimum wage employment and social assistance. This improvement was associated with a reduced dependency on social assistance among families with children. These findings were further supported by the provincial case studies which indicate that the NCB Initiative reduced social assistance caseload for families with children. However, there is also evidence that introduction of the Initiative did not lead to shorter spells on social assistance. Thus, the effect of the NCB was likely that of reducing the number of families entering assistance (Section 5.2.2).

As for direct evidence of the impact of the Initiative on the labour supply of low-income families, it, too, is mixed. On the one hand, those who had been on social assistance showed either no reductions in their labour supply, due to receipt of the NCB Supplement or an increase in their labour supply due to the NCB Initiative. On the other hand, those not on social assistance appear to show a decline in the number of hours worked due to receipt of the NCB Supplement the previous year (Section 5.2.3).

These findings support the rationale of recovering the value of the NCB Supplement from families on assistance. Lowering the “Welfare Wall” resulted in families remaining off assistance and, for those who had been on assistance, neither reducing nor increasing their labour supply (suggested by preliminary findings to date). However, they also indicate that receipt of an unconditional cash transfer by the working poor may result in reduced employment. Nonetheless, evidence from the surveys and focus groups suggests that some families used the NCB Supplement to spend more time with their children, thereby easing the work-parenting trade-offs they faced.

In addition, the current evaluation has demonstrated the important synergies which the NCB Initiative's harmonization approach has leveraged. This is clearly demonstrated from the strong benefits which are flowing from concerted attempts which both provinces/territories and the federal government have made in addressing problems from the viewpoint of governance, taken as a whole (Section 5.3). Key to this has been the strategic complementarily of program design features with respect to the initiatives undertaken jointly by the two orders of government — to the benefit of a highly vulnerable group in society. There are very important lessons to be learned here (in terms of "what works") for future joint programming in this and other areas where serious social problems require attention.

In addition to assessing whether the Initiative was effective in achieving its stated objectives, the evaluation addressed the issue of whether it was a cost-effective vehicle for doing so. A cost-effectiveness framework was prepared which set out the range of specific questions that could be addressed and described the data requirements for doing so. It concluded that existing data limitations on both incremental costs and net impacts precluded an analysis of cost-effectiveness. Nonetheless, there is indirect evidence that the delivery of the NCB Initiative is cost-effective and that it may be a more effective vehicle for reducing the incidence and depth of poverty than its predecessor program — the Child Tax Benefit.

In order to assess the continued relevance and effectiveness of the NCB Initiative in achieving its objectives, a range of quantitative and qualitative methodologies were employed including literature reviews, program manager and client surveys, client focus groups, simulations of program impacts, time series and survival analyses of social assistance data, cross-sectional regression analyses of merged survey and tax data, and difference-in-difference analyses of pre-post NCB Initiative and matched reference group outcome data.

Each of these lines of evidence had their own strengths and limitations. None of them could give a definitive picture of the impact of the NCB Initiative. That would have required the use of a random experimental design, which was clearly not possible with a universal program available to all families with children. Accordingly, the evaluations relied on corroborating lines of evidence, where available, to strengthen the conclusions cited above. That has been the key strength of the current evaluation of the National Child Benefit Initiative.