Amsterdam discovers how to motivate people on social benefits to work

A successful trial shows twofold improvement in the transition to permanent job

For a couple of years now, Amsterdam has been attempting to resolve a decades-old problem: how to stimulate people who receive social benefits to transition to permanent employment. It is known that the longer people receive such assistance, the harder it gets for them to return back to work. Luckily, earlier this week the Dutch capital shared an interim evaluation of a trial showing encouraging results in this direction.

A small reward can do miracles in the long run

The social benefits systems across the world vary greatly in terms of the amounts given to the unemployed and their duration. However, they are all based on the desire to guarantee minimum financial security to those left without income through no fault of their own, while giving them the time to find a new and permanent source of own revenue.

The problem that the city of Amsterdam is trying to resolve is a pretty familiar one: if people on social benefits find a full or part-time job, they will either lose their benefits or have them reduced by the equivalent to their earnings. This adds administrative complications and makes it much more difficult for the unemployed to take on a part-time job, even if this is legally permitted.

To see if there is a way out of this dilemma, in 2018 Amsterdam started a trial, involving a number of participants on welfare who work part-time. Those who participate in the project are entitled to an additional financial stimulus equal to 30% of their earnings, capped at 215 euros per month.

This way, the working people receiving social benefits can actually earn something on top of the social benefit and are thus more motivated than those who do not work at all. Combine this with the fact that the reward is paid in two instalments, it can become a sufficient amount to pay back debt, rent, arrears, etc.

Furthermore, this week the municipal authorities informed that the pilot brought about noticeable improvements in terms of career prospects of the participants. In particular, research results show that participants who worked up to 16 hours per week move up to permanent employment twice as fast and the situation gets even better for those who worked more hours.

The pilot will continue until 2022 when the final evaluation will take place and it will be decided if an extension is warranted.