Do Incentives for Municipalities Reduce the Welfare Caseload? Evaluation of a Welfare Reform in the Netherlands

Since 2004, most municipalities in the Netherlands receive lump sum payments from the state for the payment of social assistance allowances. As municipalities had no authority to change the eligibility rules for social assistance, the effects of the welfare reform are solely due to the efforts of municipalities to decrease the number of welfare recipients. Using variation in the timing of policy changes, this paper uses a difference-in-difference approach to assess the effectiveness of the incentive for municipalities. Based on individual panel data from administrative records, we show that th... Mehr ...