Study into the effects of activation of long-term welfare benefit recipients presented to the municipality of Rotterdam

Small chance of outflow to paid work

This new study, executed by PhD candidate Mareen Bastiaans, Prof. Robert Dur and Prof. Anne Gielen, shows what effects an activation program for long-term welfare benefit recipients in Rotterdam had on employment, income, and health. A significant group of people in the Netherlands depend on welfare benefits for a long period of time. The chance of outflow to paid work is very small for these people. For example, in 2016 – a year of low and decreasing unemployment in the Netherlands – only 2% of people who had been on welfare for at least 5 years moved from welfare to paid work. In addition, many people who have been on welfare for at least 5 years suffer from mental health problems: 20% receive antidepressants and 10% take medication against psychosis.

How to help people who have been on welfare benefits for a long time

In the period 2013-2018, an activation programme called the "quid-pro-quo" was introduced in the municipality of Rotterdam. The programme focuses on people on welfare who are at a great distance from the labour market. Each of them was contacted by an employee of the municipality and together they looked for a suitable activity. The activity (or collection of activities) must cover at least 20 hours per week. Activities consist of helping staff in community centers, caring for someone else, or working on personal problems or language deficiency. The quid pro quo is not voluntary. If you do not participate, the social assistance benefit will be reduced.

Researchers Bastiaans, Dur, and Gielen of Erasmus School of Economics studied the effect of the “quid-pro-quo” programme on the outflow to paid work and on the use of medication for psychological problems. A reliable effect measurement is possible through the step-by-step roll-out of the activation programme from district to district. This is a natural experiment: some people were confronted with the “quid-pro-quo”  early on, others only many years later. The effect measurement is based on a comparison of labour market and medical outcomes for these two groups.

Substantial decrease in the use of medication

The results show that the "quid-pro-quo" programme did not or hardly lead to extra outflow from welfare to paid work. The researchers do see a substantial decrease in the use of medication for psychological problems among people who already use such medication before participating in the “quid-pro-quo”. This decrease starts in the second year after the consideration has started and increases every year thereafter. In the fourth year after the start of the “quid-pro-quo”, 13% fewer people use medication for psychological problems compared to people who have not yet started with the “quid-pro-quo”.

A further breakdown shows that these effects are concentrated among men. Among them, the use of medication for psychological problems decreases by 28% in the fourth year as a result of the “quid-pro-quo”. A possible interpretation of these results is that it is mainly men who suffer from long-term inactivity and that the activation program therefore makes a greater difference to them. Due to a lack of data on well-being, however, the researchers cannot say with certainty that the decrease in medication for psychological problems reflects a favourable or unfavourable effect. Earlier qualitative studies into the effects of the same activation program in Rotterdam, however, point in the direction of favourable effects on mental health.

Finally, the effect of the activation programme on the children of people on welfare was also examined. The focus is on school performance and on children’s medication for psychological problems. The estimates of these effects are not very precise and differ between age groups of the children, but all together the researchers of Erasmus School of Economics find some indications of beneficial effects on the children.