Newsletter: Minimum wage, NFIA, job coaching, etc.

  • May 2020

In the past couple of months, SEOR has completed a lot of interesting projects. Here, we briefly summarize the results of some of these projects. Dutch readers can also check out our newsletter via this link.

Budgetary consequences of a higher minimum wage

In early 2019, the Dutch Socialist Party (SP) submitted an initiative note to the House of Representatives, including the proposal to increase the statutory minimum wage by 10 percent. The SP has asked SEOR to investigate the budgetary consequences of a gradual increase in the minimum wage.

The study shows that approximately 35 percent of the costs involved in increasing the minimum wage (additional expenditures on benefits linked to the minimum wage and government personnel) is compensated by additional income from taxes. The expected impact on the government budget in the fourth year of the stepwise increase is between 3 and 7 billion euros, depending on the size of the steps.

Influence of migration background on net effectivity of WerkLoont

WerkLoont is a reintegration programme for jobseekers receiving social assistance benefits from the municipality of Rotterdam. In 2012 and 2013, an experiment was conducted to examine the effects of the programme. The Dutch Ministry of Social Affairs and Employment has asked us to study what the effect of WerkLoont is for people with a non-western migration background.

On average, people with a migration background spent less time in a benefit situation when they participated in WerkLoont. We found no significant differences in the effects of WerkLoont between people with and without a non-western migration background.

Obstacles experienced by entrepreneurs when doing business in the border region of North Brabant/Zeeland and Flanders

At the request of the province of North Brabant, VNO-NCW Brabant-Zeeland and Flanders Investment & Trade (FIT), SEOR has identified the obstacles entrepreneurs of SMEs encounter when doing business in the border region of North Brabant/Zeeland and Flanders. The study shows that doing business across the border is potentially interesting for many entrepreneurs, but is more difficult than one would hope. Differences in laws and regulations (both at a national level and within specific sectors) between the Netherlands and Flanders are one of the major obstacles. Cultural differences also exist, but are seen as an interesting challenge by most entrepreneurs.

In the short term, clear and unambiguous information to entrepreneurs can remove some of these obstacles. In the long term, a single European Union in which laws and regulations are harmonized could remove most of the obstacles; this must therefore continue to be put on the political agenda.

Evaluation of the NFIA in 2010-2018

MIR, SEOR, Erasmus School of Economics and KU Leuven carried out the first evaluation of the Netherlands Foreign Investment Agency (NFIA). We examined whether the activities of the NFIA lead to additional (both initial and follow-up) investments and in the Netherlands and if so, whether these investments are relatively productive.

The evaluation concludes that it is plausible that the work of the NFIA is legitimate and largely effective. Efficiency is difficult to assess, mainly due to the lack of detailed financial information. Analysis shows that an NFIA budget of one million euros generates on average 333 direct jobs and 20 million euros in investments in the Netherlands. The NFIA also resolves the lack of information among (potentially) interested companies, and within the Netherlands improves coordination of attracting foreign investments.

The influence of teachers on STEM-related educational choices

Several times during their educational career, young people make crucial choices for a direction or sector in which they want to continue studying. The environment plays an important role in these choices: parents, friends, but also teachers, can influence them. We have performed a literature review to systematically assess the role of teachers in this process. Because of their favourable labour market prospects, we focused on STEM-related educational choices.

There is empirical evidence that the influence of teachers takes place through different mechanisms. However, their impact seems limited compared to other factors (such as parents). Our research also pays attention to how teachers feel about their influence themselves. We find that mentors and deans want to have a neutral position. Nevertheless, there are indications that there are mechanisms through which teachers influence their pupils unintentionally. 

Labour market patterns of people working with a job coach

Between 2013 and 2018, approximately 25.000 people started a job with the help of a job coach from UWV. This facility aims to enable people with an occupational disability to build more stable working lives. During this project, we studied the position of this group on the labour market and what guidance they have received.

More than 60 percent of the Wajongers who started working under the guidance of a job coach still work after three years, half of this group without the help of a job coach. On average, Wajongers work 60 percent of the time (measured from the start of job coaching). During their employment, this group is supervised by a job coach in 75 percent of the time.