Job-Search Periods for Welfare Applicants: Evidence from a Randomized Experiment

Abstract

This paper studies mandatory job-search periods for welfare applicants. During this period the benefits application is put on hold and the applicant is obliged to make job applications. We combine a randomized experiment with detailed administrative data to investigate the effects of imposing a job-search period. We find strong and persistent effects on the probability to collect welfare benefits. The reduced benefits are fully compensated by increased earnings from work. Furthermore, we do not find evidence of adverse consequences for the most vulnerable applicants.Our results therefore suggest that a job-search period is an effective instrument for targeting welfare-benefits applicants. JEL-codes: C21, C93, I38, J64, J08

Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?

“…In contrast, von Buxhoeveden (2019) shows for Sweden that the employment hazard significantly decreases once high school leavers become entitled to UI after a waiting period which partly depends on age. Also, Bolhaar et al (2019) find that imposing a job search period before the entitlement to means-tested welfare benefits in the Netherlands substantially increases the likelihood to find a full-time job and reduces the benefits take-up rate. A possible explanation for the relatively important effects in the last two studies is that the first study includes relatively short waiting periods and the latter an introduction of such a period.…”

“…This is not the first study of the behavioral effects of waiting periods for UI or welfare benefits. However, the existing papers have focused on the effect of introducing such qualifying periods (Bolhaar et al, 2019) or extending their duration (Cockx and Van Belle, 2019). Other research has studied instead the effect on work incentives of receiving benefit payments after a period of no-pay status (Bargain and Doorley, 2011;von Buxhoeveden, 2019).…”

Imperfect Monitoring of Job Search: Structural Estimation and Policy Design

“…Positive effects were found byKlepinger et al (1997),Lalive et al (2005),McVicar (2008) andBolhaar et al (2016) among others. No effect or negative effects were found byAshenfelter et al (2005),Klepinger et al (2002) and van den Berg and van der Klaauw (2006) among others.8 This appendix can be downloaded together with the data, the code and the instructions for using the code from https://www.sites.google.com/site/andreylaunov/research/CDLV.zip.9 An unemployed individual is regarded as the head of household if she lives together with a partner or relatives (children or other) whose labor earnings or allowances do not exceed a threshold set by regulations; otherwise, she is a cohabitant, or single, if living alone.…”

Do Incentives for Municipalities Reduce the Welfare Caseload? Evaluation of a Welfare Reform in the Netherlands

“…If individuals do not find a job within four weeks, they are entitled for an allowance starting from the day of their first application. As Bolhaar et al (2016) show, this discourages some claimants to show up again after four weeks. Stimulation of outflow from welfare is possible by an active policy on sanctioning insufficient search behaviour or fraud.…”