Penalty for unemployment benefit recipients can have a negative impact

The investigation may be of interest to government agencies that use sanctions to direct behavior. The researchers published their findings in a report titled “Penalties on Citizens: A Useful Tool for Behavior Change’? ” (Links to another website) Oct 28.

Each unemployment benefit recipient must apply once a week on average. Via the online UWV system, WW recipients must register whether they submit an application letter or conduct an online interview, for example. If they do not comply with their application obligation, they can receive a penalty, i.e. a feature discount, or a warning. But how effective are those sanctions and warnings?

Sanctions are not very effective

The research shows that sanctions ensured that people better adhered to their job application obligations: getting a penalty reduced the chance of a new violation by 40 percent. However, there was no evidence that the sanctions encouraged people to intensify their search for work. Thus, the decrease in violations may have been due to the fact that people reported their applications to the UWV better in a timely manner, rather than because they applied more often. There were also indications that the people who were punished earned less income from their work over time. So sanctions proved ineffective.

On the other hand, the warnings made people intensely search for new work. In addition, there was no indication that the warnings had any unwanted side effects. The results thus indicate that the warnings had a stimulating effect.

Fewer penalties, more warnings?

According to one of the authors, psychologist Eric Bielefeld of Radboud University, the findings give reason to take a closer look at the current interpretation of app commitment. We already know that the number of applications does not have a strong correlation with finding a new job. So why would you want to route on this number? Perhaps it would be best to encourage caution and the prospect of job applications. This can be done through training or coaching, but also through a new structure of reward or punishment.

Co-author Timo Verlat, a PhD student in economics at Utrecht University, believes the report could be useful to government agencies and policy makers. It is best for government agencies that use sanctions to think regularly about the structure of their penalties. Why were sanctions chosen in the first place? Of course there can be good reasons for this, but on the other hand, our report makes it clear that you simply cannot assume that sanctions are effective. A good alternative could be the use of a system that emphasizes warnings, in which sanctions are used primarily in serious cases.

The UWV has issued warnings primarily since 2018

UWC has also seen indications that warnings have a better effect than sanctions. For this reason, since 2018, the UWV has issued a warning for the first time when an application commit is violated. Punishment will follow only if the person receiving unemployment benefits has already received a warning of the same violation. Furthermore, UWV often chooses to invite people for an in-person interview. The UWV believes that an in-person meeting is more constructive to help people apply for a job and find work than a direct penalty.