Carrot and stick: How reemployment bonuses and benefit sanctions affect job finding rates

Arbeitspapier

To increase their transition from welfare to work, benefit recipients in the municipality of Rotterdam were exposed to various financial incentives, including both carrots to sticks. Once their benefit spell exceeded one year, welfare recipients were entitled to a reemployment bonus if they found a job that lasted at least six months. However, they could also be punished for noncompliance with eligibility requirements and face a sanction, i.e. a temporary reducing of their benefits. In this paper we investigate how benefit sanctions and reemployment bonuses affect job finding rates of welfare recipients. We find that benefit sanctions were effective in bringing unemployed from welfare to work more quickly while reemployment bonuses were not.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 5055

Classification and Topics

• Classification: Wirtschaft ; Unemployment: Models, Duration, Incidence, and Job Search ; Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions ; Duration Analysis; Optimal Timing Strategies
• Subject: welfare to work ; financial incentives ; timing-of-events ; dynamic selection ; Aktivierende Sozialhilfe ; Ökonomischer Anreiz ; Arbeitsuche ; Berufliche Integration ; Arbeitsmarktpolitik ; Beschäftigungseffekt ; Rotterdam

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): van der Klaauw, Bas ; van Ours, Jan C.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/44223