The research project Welfare benefits, labor participation and crime is executed by the Department of Economics and the Department of Criminology of Leiden University.

Runtime

May 2016 – May 2020

Research summary

Recent welfare reforms in the Netherlands show a trend of reducing welfare accessibility and increasing obligations. Although the effects thereof on directly-targeted economic outcomes, such as welfare dependency and labor participation, are often assessed, potential spillovers to other economic and social outcomes are often ignored. This multidisciplinary project aims to fill this gap and focuses on the relation between welfare benefits receipt, labor participation, financial wellbeing and criminal behavior. Legal, criminological and econom(etr)ic in-house expertise is utilized to infer causal effects from policy variation. Applying advanced statistical models over unique administrative individual-level data, removes traditional research limitations to advance existing insights. We aim to contribute to evidence-based welfare policy and consequently reduce crime and (in)direct social costs.

Research team

This multidisciplinary research project is a collaboration between the Department of Economics and the Department of Criminology. As such, it resides under two faculty research programs, specifically ‘Reform of Social Legislation’ and ‘Criminal Justice: Legitimacy, Accountability and Effectivity’.

Affiliated researchers:

• Koen Caminada (Promotor)
• Marike Knoef (Co-promotor)
• Paul Nieuwbeerta (Promotor)
• Anke Ramakers (Co-promotor)
• Marco Stam (PhD candidate)

Empirical challenges

To identify causal relations between active labor market policies, welfare receipt, labor participation and crime (see research questions), it is necessary to analyze variation that is exogenous for individuals, such as policy differences across time and target groups. Research into these relations has long been obstructed by endogeneity; measuring true, causal relations of these variables is problematic due to unmeasured heterogeneity and simultaneity (Davidson & MacKinnon, 2004). For example, the personality trait of having low self-control is related to both criminal behavior and poverty (Bernheim, Ray & Yeltekin, 2015; Pratt & Cullen, 2000). We tackle this problem by applying advanced econometric methods to comprehensive individual-level data covering exogenous welfare policy variation. Special interest goes out to the ‘werkleeraanbod’ and ‘zoekperiode’ active labor market policies, introduced in 2009 and 2012 respectively. An additional focus is on differences between municipalities, such as differences in welfare payment dates and obligations to maintain welfare (e.g., the ‘tegenprestatie’, a work requirement for welfare).

Societal relevance

The apparent trend of restricting or discouraging access to welfare in the Netherlands, and other OECD countries, may not only affect welfare dependency and labor participation rates, but also financial wellbeing and crime. Social developments, such as demographic ageing and internationalization, increase financial pressure on the welfare state and are likely to warrant further reforms. The potential consequences of the recent welfare reforms and those likely to come, emphasize the need for further insights into the relation between welfare receipt, labor participation, financial wellbeing and crime. This project addresses this need and contributes to evidence-based welfare policy to reduce crime and (in)direct social costs.

References

• Bernheim, B. D., Ray, D., & Yeltekin, Ş. (2015). Poverty and Self‐Control. Econometrica, 83(5), 1877-1911.
• Davidson, R., & MacKinnon, J. G. (2004). Econometric Theory and Methods. New York, NY: Oxford University Press.
• Pratt, T. C., & Cullen, F. T. (2000). The empirical status of Gottfredson and Hirschi's general theory of crime: A meta-analysis. Criminology, 38(3), 931-964.

Research questions

1. To what extent does welfare receipt affect crime? And;
   1. does this differ between crime categories?
   2. does this vary by sex and educational attainment?
2. To what extent do recent Dutch active labor market policies affect welfare receipt, labor participation and crime?
   1. To what extent does the ‘work-learn offer’ (i.e. ‘werkleeraanbod’) affect welfare receipt, labor participation and crime?
   2. To what extent does the ‘job-search period’ (i.e. ‘zoekperiode’) affect welfare receipt, labor participation and crime?
3. To what extent does the amount of time that has passed since welfare payments affect criminal behavior?

Data

This project predominately uses administrative datasets from Statistics Netherlands, which enable us to follow individuals and their households over time. Statistics Netherlands gathers administrative records from many different sources (tax office, banks, municipalities, `Polisadministratie’, `Dienst Justitiële Inrichtingen’ and the `Herkenningsdienstsysteem’ of the police). As such, highly-reliable individual-level data on many topics are combined and examined for the entire Dutch population (e.g. imprisonment, criminal charges, social security benefits, wages, active labor market programs, declared income, declared savings and debts, household compositions, educational attainment, ethnicity, etc.). As such, the study is part of the ‘big data’ initiatives undertaken by Leiden University.

Currently included datasets are bijstanduitkeringint, bijstanduitkeringtab, bus, gbaadresobjectbus, gbapersoontab, integraal persoonlijk inkomen, integraal huishoudelijk inkomen, polisbus, spolisbus and verdtab. Under certain conditions, these data are accessible for research. For further information, see cbs.nl/nl-nl/onze-diensten/maatwerk-en-microdata and microdata@cbs.nl.

Publications

• Stam, M.T.C., Knoef, M.G., & Ramakers, A.A.T. (work in progress). The effects of welfare receipt on    crime: A regression discontinuity and instrumental variable approach.
• Stam, M.T.C., Knoef, M.G., & Ramakers, A.A.T. (work in progress). Active labor market policies, youths and crime: Assessing the effects of Dutch active labor market policies on welfare receipt, labor participation and crime among young adults (working title).
• Stam, M.T.C., Knoef, M.G., & Ramakers, A.A.T. (work in progress). Welfare payment cycles and crime: Assessing the relation between welfare payment dates and temporal patterns in crime (working title).

Seminars and presentations

• Presentation of preliminary research results at the ‘Criminological Research with Register Data’ workshop, 18 mei 2017.
• Presentation of preliminary research results at the European Society for Population Economics (ESPE) conferentie in Glasgow, Verenigd Koninkrijk, 15 juni 2017.
• Presentation of preliminary research results at the European Association of Labour Economists (EALE) conferentie in St. Gallen, Zwitserland, 23 september 2017.
• Presentation of preliminary research results at the Reform of Social Legislation Symposium, 23 oktober 2017.
• Presentation of preliminary research results at the Dutch Economists Day (‘Nederlandse Economendag’) at De Nederlandsche Bank, 3 november 2017.