Timo Verlaat: Experimenting with Income Support in the Netherlands. Presentation at seminar "Finnish Basic Income Experiment – Science meets social security reform" in Kela 4.4.2019.

1. 04-04-19
Timo Verlaat
Utrecht University School of Economics
Experimenting with Income Support
in the Netherlands
Seminar: Finnish Basic Income Experiment – Science meets social security reform
Helsinki, 4 April 2019

3. (1) Introduction
(2) The experiments
(3) Status quo & outlook
04-04-19
Outline
3

4. Introduction
Social welfare in the Netherlands
04-04-19 4
• Lowest social security layer
• Means-tested benefit
• ~1,000€ / month for single person household
• Job search requirements and sanctions
• On top: child, housing & healthcare allowances
National government
Establishing legal framework
Municipalities
Executing the scheme

5. Introduction
Why experiment?
• January 2015: Welfare reform (Participation Act)
• Tightening of social security regulations
• Reform discontents many Dutch municipalities
• But: article on policy experiments
04-04-19
Is there
another way?
5

6. Introduction
A movement of experimenting cities*
*In the beginning, more than 40 Dutch
cities were planning to experiment.
Eventually, six cities remained.
04-04-19 6

7. (1) Introduction
(2) The experiments
(3) Status quo & outlook
04-04-19
Outline
7

8. The experiments
Theoretical framework
04-04-19 8
What can we learn from behavioral sciences?
Scarcity and poverty stress affect people‘s mindset
(Mullainathan & Shafir, 2013; Mani et al., 2013)
Crowding out of intrinsic motivation
(Deci, 1971; Frey & Jegen, 2001)
Reciprocity and fairness concerns
(Fehr & Schmidt, 2000; Thaler, 1980)

9. The experiments
Fast facts
• Cooperation between cities and local universities
• Randomised Controlled Trial with current social welfare recipients
• Duration of 1.5 - 2 years
• Groups of 100-200 subjects depending on experiment
• Voluntary participation
04-04-19 9

10. The experiments
Generic experimental groups*
04-04-19
Treatment 2: Intensive support
• Tailormade supervision and intensive mediation
• Approx. twice as much contact moments
Control
• No changes; status quo regime
Treatment 3: Earnings release
• Earnings on top of benefits are released more generously
• Keep 50% of income up to 202€/month
Treatment 1: Exemption
• No compliance requirement & benefit sanctions
• Autonomy with regards to reintegration activities
10
*As approved by the Ministry of
Social Affairs and Employment.
Combinations of groups are possible.

11. The experiments
Practical implementation
04-04-19
Average contact moments per group*
[in person & remote; initiated by welfare department]
*Example from Utrecht experiment 11

12. The experiments
Outcomes of interest
04-04-19
Labour market outcomes
• Employment
• Earnings, hours, contracts Register data
Participation & social activation
• Activities
• Social contacts
Health & well-being
• Overall health, mental health, stress
• Well-being measures
Satisfaction w/ scheme
• Satisfaction w/ rules
• Satisfaction w/ municipality
Financial situation • Perceived situation
Survey data
1. Baseline
2. Midline
3. Endline
4. [Post-experiment]
12

13. The experiments
Evaluation on the national level
04-04-19 13
Differences between cities with regards to:
• Status quo regime
• Combination of treatments
• Start of experiment
But, harmonisation of:
• Target group
• Outcome measures and surveys
• Evaluation strategy (common pre-analysis plan)

14. (1) Introduction
(2) The experiments
(3) Status quo & outlook
04-04-19
Outline
14

15. Status quo & outlook
Where are we standing at the moment?
04-04-19 15
End of 2017
Start
April 2019
6 months to go
October 1, 2019
Experiments end
Baseline Midline Endline

16. Status quo & outlook
What’s happening next?
• Experiments in all six cities finish on October 1st, 2019
• First results expected in February 2020
• Evaluation on national level and comparison between cities
after February 2020
04-04-19 16

17. 04-04-19
Thank you for your attention.
Timo Verlaat
Utrecht University School of Economics (U.S.E.)
t.l.l.verlaat@uu.nl
@timoverlaat
17