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Research Seminar Series

For questions and suggestions regarding the series, please contact prof. dr. Olaf van Vliet, prof. dr. Marike Knoef or dr. Max van Lent

The effects of debt relief on work and mental health among the financially vulnerable: Quasi-experimental evidence

Wednesday 1st February 2023, 10.00-11.00h. Kamerlingh Onnes Building, room B032.
Ernst-Jan de Bruijn (joint work with Heike Vethaak, Marike Knoef, and Pierre Koning) (Leiden Law School)  

We study the labor market and mental health impacts of debt relief among financially vulnerable individuals. We exploit a cutoff rule used by a Dutch welfare agency to determine eligibility to debt relief of welfare debts. We instrument this cutoff in both a fuzzy regression discontinuity and instrumented difference-in-difference design. Using administrative data, we estimate economically small and insignificant effects of debt relief on labor market outcomes and mental health. We discuss some explanations for these results.  

Application Processing Times and Prepayments in the Dutch Welfare System

Wednesday 14th December 2022, 15.30-16.30h. Kamerlingh Onnes Building, room B020.
Heike Vethaak (Leiden Law School)  

In this paper we investigate the effects of lengthy application processing times on welfare applicants. For causal inference we use variation in application processing times between randomly assigned caseworkers as an instrumental variable using the ‘judge leniency’ design. We find that processing times only affect the timing of welfare benefits and employment, but not the cumulative results of the economic outcomes. We argue that absence of direct financial consequences of longer application processing times and the rich availability of prepayments to prevent liquidity constraints explain our findings. However, in an additional analysis we show that long application processing times without receiving prepayments can have large negative consequences on the applicants.

Magnitude and effectiveness of shadow education in Dutch primary schools

Monday 14th November 2022, 10.00-11.00h. Kamerlingh Onnes Building, room B020.
Kim Fairley (joint work with Ron Diris) (Leiden Law School)

This study examines the effect of shadow education in Dutch primary schools as potential channel for inequality of opportunities in the Netherlands. Based on a survey we distributed via Kantar (n=4695 children), 26% of surveyed parents indicated that their childen are currently enrolled in some form of shadow education. Perhaps surprisingly, we do not find that the use of shadow education in primary schools is shaped by parents' educational attainment. We do find that the particular form of shadow education is modestly shaped by parents' social economic status, indicating remedial for children from parent with lower social economic status and striving for excellence for children from parents with higher social economic status. Importantly, we do not find that the students who undertake shadow education have better school results, but we find a classic Ashenfelter's dip in our results: parents react strongly to a one-time negative school result by enrolling their children in shadow education. In the subsequent period after enrollment, school results are back to normal and seem to be positively influenced by shadow education, yet are caused by the artefact of the school result in the previous period. 

Elicitation and aggregation of preferences through hypothetical allocation of public budget

Tuesday 11th October 2022, 11.00-12.00h. Location: Kamerlingh Onnes Building, room B032
Marion Collewet (Leiden Law School)

This paper presents a new method to elicit and aggregate preferences of citizens over public projects. The method consists of letting citizens allocate a limited public budget across public projects in a choice experiment (Participatory Value Evaluation). Cardinal utilities are estimated from this choice experiment, and aggregated to evaluate a social welfare function. We argue that aggregating utilities is possible because the measure of utility we aggregate is made comparable across individuals by the experimental setting. We argue that aggregating utilities is desirable because it takes into account different marginal utilities of income and fairness considerations of citizens.

International taxation and bilateral royalty flows

Tuesday 4th October 2022, 11.00-12.00h. Location: Kamerlingh Onnes Building, room B020
Maarten van 't Riet (Leiden Law School / CPB)

Shifting intellectual property rights over jurisdictions is one of a multinational’s strategies to lower corporate income taxation. The direction of the reimbursements of IP-licenses can be used by multinationals to allocate profits globally. We investigate to what extent bilateral royalty flows are indeed affected by differences in corporate income and withholding taxes. Using OECD data between 2014 and 2018, we try to isolate the influence of effective tax rates on the IP-location. These rates are derived from a network analysis which distinguishes direct planning gains of IP-shifting and treaty shopping gains. The latter are gains from exploiting lower bilateral withholding taxes through conduit countries. We employ Poisson Pseudo Maximum Likelihood estimators and conclude that direct planning gains increase the size of bilateral royalty flows and that higher withholding taxes on royalty flows decrease its size. We estimate that about 25% of the royalty flows is motivated by tax planning motives.

The retirement-consumption puzzle: Evidence from Dutch transaction data

Tuesday 20th September 2022, 12.00-13.00h. Location: Kamerlingh Onnes Building, room B020
Pim Koopmans (Leiden Law School)

Flexibilisering, globalisering en technologische vooruitgang: gevolgen voor arbeidsmarkt en sociale zekerheid

4th July 2022, 12.00-13.00h. Location: Kamerlingh Onnes Building, room B026
Lars van Doorn (Leiden Law School)

The optimal design of welfare: taxpayers’ preferences

28th June 2022, 14.00-15.00h. Location: Kamerlingh Onnes Building, room A002
Marion Collewet (Leiden Law School, joint work with Kim Fairley, Roseline Kessels, Marike Knoef, and Olaf van Vliet)

The optimal design of welfare is characterized by a trade-off between insurance and incentives. While we know a lot about the incentive effects of welfare systems, we know a lot less about how taxpayers value the insurance motive and about what drives their views. In this paper, we run a choice experiment with 2000 survey respondents representative of the Dutch population. We ask them to make choices between policy packages, characterized by different levels of income for welfare recipients, different obligations, different levels of sanctions, of earnings disregards, of gifts disregards, and different annual costs of welfare in terms of taxes for the average Dutch household. Respondents are in favor of fulfilling the insurance motive through relatively generous benefits and disregards, and of satisfying the incentives motive by other means, such as monitoring and activation. We find that respondents’ preferences for the design of welfare are driven mainly by self-interest, preference for equality, and trust in government, but not by risk aversion.

Workers’ Moral Hazard and Insurer Effort in Disability Insurance

Thursday 23th June 2022, 11.00-12.00h. Location: Kamerlingh Onnes Building, room A002
Max van Lent (Leiden Law School, joint work with Pierre Koning)

Disability Insurance (DI) may affect workers' probability to enter DI, to recover, and employment. Supplementary insurance may increase these moral hazard effects, but also increases the financial gains of private insurers to reduce benefit costs. With increased prevention and reintegration, the overall effects of increased insurance coverage on workers' outcomes are thus ambiguous. This paper aims to separate worker and insurer responses to increased insurance, using unique administrative data on firms' supplementary DI insurance. Using a Two-Way Fixed-Effects model on the sickness and employment rates of worker cohorts with and without supplementary contracts at some point in time, we find that insurer efforts compensate workers’ moral hazard effects.

New projects

Tuesday 14th June 2022, 14.00-15.00h. Location: Kamerlingh Onnes Building, room A002
Richard Karlsson Linnér (Leiden Law School) discussed some of his new projects, with the preliminary titles:

  • Measuring selection in insurance products due to genetic prediction
  • Predicting selective lapsation of insurance contracts with genetic risk scores
  • What is the link between unobserved genetic risk factors and variation in subjective probabilities?
  • A study of the willingness to share DNA for science in the LISS panel

Fostering trust: When the rhetoric of sharing can backfire

Thursday 12th of May 2022, 13.30 – 14.30h. Location: Kamerlingh Onnes Building, room B020
Simona Cicognani (joint with Giorgia Romagnoli and Ivan Soraperra)

The peer-to-peer lending and transfer of underutilized resources - the so-called Sharing Economy - make up for a sizeable and rapidly increasing portion of the economy. The digital platforms that enable it have the primary goal of promoting trust among users and providers. In an online experiment, we study how the platform’s revenue model (pure-sharing vs. for-profit) interacts with the communication strategy in shaping trust. In particular, we consider two communication strategies, one highlighting the trust dimension and the other one highlighting the profitability of the interaction, and we show how these strategies can have different effects on trust for pure-sharing and market-oriented for-profit platforms. We observe that a communication strategy that evokes trust feelings if sent by a for-profit platform decreases trust in the interaction. This evidence suggests that leveraging a rhetoric of trust can backfire for-profit oriented platforms in terms of trust generation.

Free-riding on scrappage subsidies: Evidence from a vehicle retirement acceleration programme in the Netherlands 

Monday 9th of May 2022, 11.00 -12.00h. Location: Kamerlingh Onnes Building, room B020
Hendrik Vrijburg (joint with Alexandros Dimitropoulos)

Scrappage subsidies are often viewed as an effective policy instrument to stimulate economic activity during periods of recession and to massively replace old and polluting durable goods with newer, cleaner and more energy-efficient ones. However, the effectiveness of such subsidies in reaching their environmental and economic goals is frequently hampered by adverse selection, which enables participants to free-ride on the subsidy or to undertake only minimal behaviour changes. We study Dutch vehicle owners’ behavioural responses to a nationwide programme offering a subsidy to those scrapping an old light-duty vehicle and replacing it with a newer and cleaner one. Using a unique dataset on all vehicle registrations and retirements in a six-year period and a triple-difference approach, we empirically estimate the effects of the policy. We find that the policy was successful in removing old vehicles earlier from the roads, in temporarily stimulating economic activity in the car market and in accelerating the greening of the vehicle fleet. Only a very small share of participants can be characterised as pure free-riders, i.e. individuals who would have anyway scrapped their old vehicle and replaced it with an eligible one in the year the policy was implemented. However, most participants receive a subsidy only for offering a functional vehicle for scrap instead of selling it on the second-hand market – a likely costless change for them. On the purchase side, the policy may only have induced individuals that would anyway buy an eligible vehicle to bring their decision forward.  

The relation between skills and job security: International evidence from PIAAC

Monday, 28th of March, 2022. 12.00-13.00h, Kamerlingh Onnes Building, room B014
Ron Diris (Leiden Law School)
The last decades have shown that the traditional steady job with a permanent contract is on the decline, and that flexible employment (fixed-term employment, temp agency work, gig work) is becoming more common. This trend may create a divide in the labour market between insiders and outsiders. Particularly, flexible employment has been shown to relate negatively to job satisfaction, human capital investment and fertility. As such, indefinite contracts and the insider position that they bring are valued by workers. Research on the returns to education and skills have, however, predominantly focused on wages and employment as outcome measures. This study uses PIAAC data from 29 countries to estimate how skills relate to the odds of obtaining a permanent contract, as opposed to alternative flexible contract arrangements for employees. We find that skills relate
substantially to the odds of obtaining a permanent contract. Numerical skills contribute more than literacy skills; a difference that is largely driven by sorting to occupations and industries. We further identify substantial heterogeneities across countries, in which either no skills, only numerical skills or only literacy skills significantly predict permanent employment at the country level, but never both. Moreover, these country-level skill returns to job security differ substantially from country-level skill returns to wages. We find indicative evidence that these differences are partly driven by demand factors and labour market institutions.

FGGA Research Seminar: Globalisation and migration: The political economy of welfare state reform

Thursday 22 November 2018 15.30-17.00h, Wijnhaven, room 4.78.
Click here.

Preventing NEETs During the Great Recession: The Effects of a Mandatory Activation Program for Young Welfare Recipients

Monday 23 January 2017 11.30 – 12.30h, Kamerlingh Onnes Building, room B020 
Emile Cammeraat (Leiden Law School) 
We study the impact of a mandatory activation program for individuals up to 26 years of age in The Netherlands. The program, introduced in 2009, after the start of the Great Recession, aimed at preventing young NEETs (not in employment, education or training). Using a rich administrative data set for the period 1999-2012, we perform both a differences-in-differences analysis and a regression discontinuity analysis, using individuals 25-26 as a treatment group and those 27-28 years of age as a control group. We find that the reform reduced the number of NEETs on welfare, increased the number of NEETs not on welfare, and had no effect on the overall number of NEETs. Furthermore, we find no `treatment effect' on the employment rate, nor on the enrollment rate in education. Hence, the reform did not have the intended effect of reducing the number of NEETs, but instead pushed the NEETs out of welfare.

Bestedingen van ouderen: de ontwikkeling van het uitgavenpatroon van gepensioneerden onder de loep

Tuesday 27 September 2016, 11.00 – 12.00h, Kamerlingh Onnes Building, room C004 
Anna van der Schors (NIBUD) 
Dit onderzoek geeft inzicht in de bestedingen van gepensioneerden in het licht van allerlei maatschappelijke ontwikkelingen die van invloed zijn op hun financiële situatie. Gekeken is naar de ontwikkeling van het uitgavenpatroon in de periode voorafgaand aan en volgend op pensionering, vanaf 50 jaar tot het moment van overlijden. Hiervoor is gebruik gemaakt van het meest recente Budgetonderzoek van het Centraal Bureau voor de Statistiek (CBS), uit 2013. We zien dat gepensioneerden aan bepaalde posten meer uitgeven dan 65-minners. Vooral aan de zorgkosten wordt meer uitgegeven en we verwachten, gezien het huidige zorgstelsel, WMO en Wet langdurige zorg, dat deze kosten in de toekomst zullen toenemen. 
Ook aan huishoudelijke hulp, stookkosten en contributies en abonnementen wordt meer uitgegeven naarmate men ouder wordt. Bij gepensioneerden vinden we een duidelijke stijging bij de vrijetijdsuitgaven, maar als ze ouder worden nemen deze uitgaven weer af. 
Wanneer een koophuis is afbetaald wordt minder uitgegeven aan woonlasten. Maar er zijn wel zorgen over de groep huurders en koopwoningbezitters met een aflossingsvrije hypotheek of een nog niet afbetaalde hypotheek.


Wednesday 31 August 2016, 11.00 - 12.00h, Kamerlingh Onnes Building, room B035 
Olaf van Vliet (Leiden Law School) 
Recently, Leiden University has adopted a Regulation for Data Management. Data management includes all decisions and actions needed to organize, structure, store and care for the information used or generated during a research project. The purpose of data management is to make research data discoverable, accessible and understandable in the long term. As most of us are working with data, Leiden University’s new regulation has implications for us as researchers. For instance, one of the implications is that each research project should be equipped with a Data Management Plan. In this Research Seminar, I will introduce the new regulation. Furthermore, we can discuss how we can make the research projects of our department ‘data management-proof’.

Making Disability Work: The Effects of Financial Incentives on Partially Disabled Workers

Thursday 31 March 2016, 11.30 – 12.30h, Kamerlingh Onnes Building, room C020 
Pierre Koning (Leiden Law School) 
This study provides insight in the responsiveness of disabled workers to financial incentives, using administrative individual data from the Netherlands from 2006 to 2013. We focus on workers receiving partial DI benefits and with substantial residual work capacities that can be exploited. After the first phase of benefit entitlement, workers that do not use their residual income capacity experience a large drop in benefit income. In effect, this implies a substantial increase in incentives to resume work. With entitlement periods in the first phase of DI benefits varying across individuals, we use a difference-in-difference approach to analyze the effects on the incidence of work, the wage earnings and full work resumption of disabled workers. Based on the effect estimate on work incidence, we infer a labor elasticity rate of 0.12. Elasticity estimates are highest among younger DI recipients, as well as individuals with mental impairments. The incentive change has only a limited impact on wage earnings of partially disabled workers and no significant impact on work resumption rates.

Stimulating prosocial behavior by way of punishment: a field experiment into sorting of household waste

Tuesday 12 January 2016, 11.30 – 12.30h, Kamerlingh Onnes Building, room A014 
Ben Vollaard (with Daan van Soest), Tilburg University
When using extrinsic incentives to stimulate prosocial behavior, rewards are the policy of choice, even though the evidence suggests that the ‘carrot’ may be less effective than the ‘stick’. We focus on behavior that is typically stimulated by rewards and moral appeals: sorting household waste. We study the effect of stressing the illegal nature of incorrectly sorting waste, and subsequent enforcement of the rules (by the so-called ‘kliko-politie’). For a period of a month, detected offenders get a highly visible, brightly colored warning label attached to their garbage container; repeat offenders may get fined. In addition, a random sample receives feedback in the form of a white label that no wrongdoing has been detected. We randomly vary the timing of introduction of this one-month treatment among 60,000 households in the city of Tilburg, the Netherlands. We find a sharp increase in the percentage of household waste that is sorted in response to the treatment. Given concerns about loss of intrinsic motivation, we follow households for many months after the intervention ended. We find some decay in the behavioral effect over time. The white labels do not seem to have had an effect on behavior.   

The elasticity of taxable labour income in the Netherlands

Monday 14 December 2015 
Egbert Jongen (Leiden Law School) 
We study the elasticity of taxable labour income of employees in the Netherlands. The large 2001 Dutch tax reform generates substantial variation in marginal tax rates at different segments of the income distribution. We instrument the endogenous marginal tax rates with synthetic marginal tax rates using projected income. We control for exogenous income growth by including a number of socioeconomic variables, sector dummies, and log base-year income or a spline in log base-year income. For all workers we find an elasticity of 0.24. For high wage workers we find higher elasticities. We also compare the elasticity of taxable labour income with the elasticity of hours worked.

Pension wealth and retirement expenditure goals before and after the crisis

Monday 2 November 2015 
Lieke Kools (Leiden Law School) 
Based on a combination of survey and administrative data, De Bresser and Knoef (2015) investigated the retirement readiness of the Dutch population in January 2008, at the eve of the downturn in the financial markets. The majority of Dutch households saved enough for their retirement, but there was also a substantial number of households who were expected to fall short with regard to their self-reported minimal and preferred level of expenditures during retirement. When accrued pension rights and savings (without housing wealth) were considered, 35% of the people was expected not to meet their self-reported desired consumption needs during retirement. 26% was expected not even to be able to fulfill his or her self-reported minimal consumption needs. During the crisis house prices have fallen. Also, pension entitlements have been cut. On the other hand, people may have adjusted their consumption ambitions for retirement as a result of the crisis and the gloomy media reports about pensions. Therefore, we have again conducted the questionnaire on minimal and preferred level of expenditures during retirement (consumption ambitions). The first results show people adjusted their consumption ambitions downwards, though this adjustment is on average smaller than the drop in wealth holdings. Still, more individuals are now able to meet there consumption ambitions after retirement, suggesting that the ‘right’ people have adjusted their ambitions.  

Home production as a substitute to market consumption

Monday 5 October 2015 
Jim Been (Leiden Law School) 
Becker’s 1965 theory of home production suggests that people will substitute away from market consumption as the opportunity cost of time drops. This makes people able to smooth consumption in response to shocks in income. Prior studies have investigated the effect of a drop in the cost of time on home production by analyzing shocks of retirement, unemployment and disability. Such shocks both decrease the households monetary budget and increase the time budget simultaneously. Hence, home production responses are the cumulative effect of decreased market consumption and increased non-market time available. The seminar discusses two recent papers that contribute to the literature by separating an increased time endowment from a pure substitution effect. The first paper estimates an elasticity between market consumption and home production for retirees using exogenous and unanticipated variation in houseprice shocks from the Great Recession. The second paper estimates the causal effect of couples’ retirement decisions on simultaneous consumption spending and home production decisions. For causal identification, the paper exploits legislation regarding Social Security benefits claiming. Both papers suggest  that much of the home production responses to shocks come from increased time endowments. The substitutability between market consumption and home production exists, but the scope for substitution is rather limited. The results indicate that traditional analyses of the adequacy of retirement savings, using income or consumption spending, underestimate the adequacy of retirement savings for well-being as retirees have more non-market time available.

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