Canada has a universal social assistance program that is almost completely administered through the federal Canada Assistance Program. However, provinces determine the levels of assistance for various groups eligible for welfare. This article exploits the variation in payments and uses microdata to estimate the effect of changes in welfare benefits on welfare participation, single parenthood, births out of wedlock, divorce, and labor force participation among low-income women. In Canada, it would appear that welfare benefits influence these decisions.

[T]he literature of risk aversion and risk preference [is] one of the richest sources of ad hoc assumptions concerning tastes. ... [N]o significant behavior has been illuminated by assumptions of differences in tastes. ... [Such theories] have been a convenient crutch to lean on when the analysis has bogged down. ... They give the appearance of considered judgement, yet really have only been ad hoc arguments that disguise analytical failures. -George J. Stigler and Gary S. Becker (1977 p. 89)