Punitive Sanctions and the Transition Rate from Welfare to Work

Gerard J. van den Berg
Bas van der Klaauw
Jan C. van Ours

Journal of Labor Economics 22, 211-241 (2004).

In The Netherlands, the average exit rate out of welfare is dramatically low. Most welfare recipients have to comply with guidelines on job search effort that are imposed by the welfare agency. If they do not, then a sanction in the form of a temporary benefit reduction can be imposed. This paper investigates the effect of such sanctions on the transition rate from welfare to work using a unique set of rich administrative data on welfare recipients. We find that the imposition of sanctions substantially increases the individual transition rate from welfare to work.

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Last updated: March 12, 2004.