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Deter and Deteriorate: The Effects of Application Processing Times on Welfare Receipt and Employment

Author

Listed:
  • Vethaak, Heike

    (University of Leiden)

  • de Bruijn, Ernst-Jan

    (Leiden University)

  • Knoef, Marike

    (Tilburg University)

  • Koning, Pierre

    (Vrije Universiteit Amsterdam)

Abstract

This paper investigates the effects of application processing times on welfare applicants’ benefit and employment outcomes. For causal inference, we exploit exogenous variation in application processing times stemming from the random assignment of caseworkers. Our findings indicate that longer application processing times deter applicants from receiving benefits, particularly those with better labor market prospects. In contrast, for applicants who eventually receive benefits, longer processing times reduce labor market attachment and increase benefit dependency. Finally, using exogenous variation in caseworkers’ provision of benefit prepayments, we find that the receipt of welfare prepayments increases the employment and earnings of awarded applicants. This suggests that reduced financial stress improves successful job search.

Suggested Citation

  • Vethaak, Heike & de Bruijn, Ernst-Jan & Knoef, Marike & Koning, Pierre, 2025. "Deter and Deteriorate: The Effects of Application Processing Times on Welfare Receipt and Employment," IZA Discussion Papers 17839, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp17839
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    More about this item

    Keywords

    instrumental variables; benefit prepayments; processing times; program application; welfare benefits;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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