This discussion paper resulted in a publication in the 'Journal of Applied Econometrics', 2013, 28, 275-296.<P> To increase their transition from welfare to work, benefit recipients in the municipality of Rotterdam were exposed to various financial incentives, including both carrots to sticks. Once...</p>

This paper investigates how in addition to personal characteristicstheneighborhood affects the individual transition rate from welfare towork.We use a unique administrative database on welfare recipients inRotterdam,the second largest city of The Netherlands. We find that the exitrate towork of...

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...