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Unemployment can be a difficult period, and people may need both a financial safety net and a push to start searching for work. PhD candidate Heike Vethaak studied the impact of incentives used by benefit agencies to encourage job seekers to expand their search for employment. Surprisingly, the results show that the effects of these incentives are often contradictory.
There’s a widespread notion in public and political opinion that unemployment benefits shouldn’t be too comfortable, as it may reduce the incentive for the unemployed to pursue paid work. Economist Heike Vehaak, however, has researched which incentives from the UWV and the municipality increase the likelihood of finding a job. The aim is for the social security system to stay affordable and for individuals to be happier and healthier when they have work.
A UWV experiment conducted between 2015 and 2017 involved 130,000 individuals who had been receiving unemployment benefits for at least six months. They had an additional meeting with their client manager emphasizing the need to widen their job search, beyond jobs matching their previous qualifications, experience, salary, or travel time. Those who didn’t follow through risked having their benefits cut. The job seekers did indeed find work sooner, but it wasn’t solely due to the widened job search requirement, according to Vethaak. The additional meetings with the client managers were found to have a more positive effect. In fact, requiring the job seekers to widen their search was counterproductive.
In another study, Vethaak researched the effects of delays in the social assistance benefits application process in Rotterdam. The results suggested that a delay in receiving benefits can have significant effects, particularly for those with higher chances of finding work. The study found that a longer application procedure had negative effects on applicants who did eventually receive social assistance benefits.