Economics at your fingertips  

Making work pay for the indebted? Assessing the effects of debt services on welfare recipients

Pierre Koning ()

Labour Economics, 2015, vol. 34, issue C, 152-161

Abstract: This paper investigates the effects of an intervention that was targeted at a specific group of Dutch Social Assistance (SA) recipients with debt problems. Since a large share of the income gains of work resumption is earmarked for creditors, these individuals generally experienced a strong a priori disincentive to resume formal work. The intervention had three aims: restructuring personal debts, preventing the occurrence of new debt problems, and increasing the direct incentives to resume work. The paper uses the Timing-of-Events method to identify the effects of debt programs on SA spells. Our main finding is that the debt program substantially increased the exit out of the SA schemes, but this was mainly due to exits out of the labor force. With a large share of assigned individuals who did not participate in the scheme, it appears that individuals perceived or experienced the program as unpleasant and opted to exit without work. Our results suggest the presence of threat effects, particularly for individuals who were assigned by their caseworkers but did not participate in the debt program.

Keywords: Debt services; Program evaluation; Threat effects (search for similar items in EconPapers)
JEL-codes: C21 D14 H75 I38 J18 K35 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.labeco.2015.03.003

Access Statistics for this article

Labour Economics is currently edited by A. Ichino

More articles in Labour Economics from Elsevier
Bibliographic data for series maintained by Haili He ().

Page updated 2020-05-02
Handle: RePEc:eee:labeco:v:34:y:2015:i:c:p:152-161