This paper investigates how in addition to personal characteristics the neighbourhood affects the individual transition rate from welfare to work. We use a unique administrative database on welfare recipients in Rotterdam, the second largest city of The Netherlands. We find that the exit rate to...

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...