9 March 2017

Utrecht University and City of Utrecht start experiment to study alternative forms of social assistance

Utrecht University and the City of Utrecht have teamed up for the experiment ‘Weten wat werkt’, a study into the effects of less conditional social assistance (bijstand). Under the current system, the Dutch Participation Act (Participatiewet) prescribes strict duties and entitlement conditions for people who receive social assistance. Whether obligations work best to reintegrate people and encourage them to participate in society remains to be seen. 

During the experiment groups of social assistance claimants in Utrecht will receive benefit payments under varied conditions for a period of two years. Some of the participants will be exempted from reintegration obligations. Others will be offered extra help and support or additional financial incentives. Outcomes of interest are re-integration into the labour market and societal participation, as well as participants’ well-being, satisfaction and financial situation. Also the cost of the different schemes will be assessed. The research will be conducted by a group of researchers from Utrecht University School of Economics (U.S.E.), prof. dr. Stephanie Rosenkranz, dr. Loek Groot, dr. Mark Sanders and Timo Verlaat (MSc). The experiment is planned to start in May 2017.

Based on behavioural insights

The theoretical foundations of the experiment root in evidence from the field of behavioural economics, which argues that individuals are not just driven by financial motives, as standard economic theory assumes, but also by strong non-financial motives. Relevant mechanisms in this regard might be concerns for fairness and reciprocity, crowding-out of intrinsic motivation by extrinsic motivation, and the effects of poverty and financial scarcity on individuals’ cognitive capacity.

What does the experiment look like?

The experiment consists of one control and four treatment groups. After two years, the results of all these groups will be compared. Group 5 will start later, for the formal approval of the Ministry of Social Affairs and Employment is required.

Explanation of the five groups:

  1. Group 1 is the control group. For this group the current rules remain in place. This allows for a comparison between and non-treated participants.
  2. Group 2 does not have an obligation to reintegrate. Participants are therefore no longer obliged to apply for a job, for instance.
  3. Group 3 does not have an obligation to reintegrate. This group is offered additional help and support to participate and find a job.
  4. Group 4 does not have an obligation to reintegrate. Participants in this group can earn an additional 125 euros per month, if they carry out an activity that is offered by the municipality.
  5. Group 5 does have an obligation to reintegrate. Participants in this group are allowed to earn some money on top of their benefits. For two years they are allowed to keep 50 per cent of their earnings to a maximum of 199 euros per month (currently, this is limited to six months, and 25 per cent of earnings can be kept).

Who will participate?

Participants will be selected through a lottery. This gives everyone an equal chance to participate. Participation is voluntary, of course. Participants, however, cannot choose which group they want to be selected in. They will be randomly assigned to one of the five groups.

Those selected to participate will receive detailed information about the study in advance, including information about the consequences of their participation. Participants will not suffer any financial or other damages because of their participation.

No study on basic income

In the media, the experiment in Utrecht is sometimes referred to as a study on basic income. However, this is not the case. Participants do not receive a basic income. ‘Weten wat werkt’ is a study into an alternative approach to deliver social assistance.

For more information on the experiment, see the official press release of the City of Utrecht (in Dutch).