Requirements vs. Autonomy: What Works in Social Assistance?
67 Pages Posted: 31 Dec 2020 Last revised: 23 Jun 2021
Date Written: June 21, 2021
Compliance requirements, such as active job search, in combination with monitoring and sanctions are a commonly used tool to induce effort among social assistance claimants and achieve reemployment as quickly as possible. We conduct a randomized field experiment in the Netherlands to test two alternative regulatory approaches, which both build on providing claimants with more autonomy. For our first treatment we fully exempt claimants from requirements, monitoring and sanctions. For our second treatment claimants follow a one-on-one counselling programme shaped according to their needs and wishes. We find that compared to control, exempted claimants are twice as likely to have a job with earnings above the benefit level roughly two years later. Also, we observe a shift from temporary to permanent employment contracts under exemption. For counselling we find largely temporary labor market effects. Using surveys, we find no evidence of effects on outcomes related to health and well-being, social participation and job search behavior for both treatments. We also analyze effects on subgroup level.
Keywords: Welfare, RCT, Minimum Income Guarantee, Social Assistance, Policy Evaluation
JEL Classification: C93, H53, I38, J64
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