In the Netherlands, the average exit rate out of welfare is dramatically low. Most welfare recipients have to comply with guidelines on job search effort that are imposed by the welfare agency. If they do not, then a sanction in the form of a temporary benefit reduction can be imposed. This article investigates the effect of such sanctions on the transition rate from welfare to work using a unique set of rich register data on welfare recipients. We find that the imposition of sanctions substantially increases the individual transition rate from welfare to work.

Identifying policy-relevant treatment effects from randomized experiments requires the absence of spillovers between participants and nonparticipants (SUTVA) or variation in observed treatment levels. We find that SUTVA is violated for a Danish activation program for unemployed workers. Using a difference-in-differences model, we show that nonparticipants in the experiment regions find jobs more slowly after the introduction of the program than workers in other regions. We estimate an equilibrium search model to identify the policy-relevant treatment effect. A large-scale rollout of the program is shown to decrease welfare, while a standard partial microeconometric cost-benefit analysis concludes the opposite.

We use a unique combination of register and survey data from Amsterdam to investigate the performance of school assignment mechanisms in practice. We find that deferred acceptance (DA) results in higher mean welfare than the adaptive Boston mechanism. This is due to students making strategic mistakes. The welfare gain of a switch from actual Boston to DA is over 90% of the welfare difference between actual Boston and optimal (proxy) Boston. Disadvantaged and lower-ability students would benefit most from such a switch.