‘Ultimately, we all want to reduce social inequality’

Does someone who grows up in a family that depends on benefits run an increased risk of ending up on benefits too? This ‘spill-over effect’, as posited by policymakers, is being researched by Anne Gielen, who was appointed Professor of Labour Economics and Policy at Erasmus School of Economics in October 2019.  In addition, she will be one of the speakers at Erasmus University Rotterdam’s dies natalis on 8 November. In her research, Gielen studies to which extent people’s reliance on benefits is transferred to the next generation, and how this process influences social and economic inequality between the employed and the unemployed. The underlying objective: to reduce social inequality in our society. 

Could you give us the gist of your research? 
"When people formulate new policies – relating to benefits, for example – I believe that the considerations they take on board are too limited. In previous research, I examined how unemployment benefits not only affect people’s ability to find a job but also their health, for example. If an “activation measure” results in people being forced to accept a job, this isn’t always the best outcome at the individual level. Due to circumstances, some people simply aren’t able to work. In cases like this, activation can also lead to stress or health problems. I’ve also examined which impact benefits regulations have on people’s partners.

In my current research, which I am able to perform thanks to a Vidi grant, I examine the influence of current benefits policy on the recipients’ children. The underlying idea is that if we observe that existing policy has a significant effect on the next generations, this should be taken on board when the government formulates new policy. This research plan was well received by the Ministry of Social Affairs and Employment, since they can definitely make use of new data in this area. The first benefit we looked into was the Incapacity Allowance."

Why did you focus on work disability first?
"We rolled into it, more or less: the existing scheme had been reformed in the 1990s, and this yielded data that I could use in the study. In the 1990s, a great many people received disability benefits. This scheme also masked a lot of hidden unemployment. The policy reform involved cutting benefits for recipients under 45. Older recipients weren’t cut, so I looked into the group of people aged around 45. We also have plans to extend this study to changes in the Unemployment Insurance Act (WW) and welfare benefits. Disability benefits are a very specific category, and may not say that much about the other two schemes. But it’s a start."

And what did you find?
"We see that on the whole, the children of parents whose benefits were cut are indeed less often dependent on benefits when they grow up. As adults, they’re employed more often and also have a higher income. I was also interested in other aspects of this subject: how are those children faring in general? That’s why we also looked into health and criminal behaviour. And here too, we see that this group generally uses less medication and is less likely to become involved in criminal behaviour. Taken as a whole, I feel fairly confident in saying that children whose parents received a benefits cut at the time are doing better than their peers."

"Tinbergen was involved in social problems like poverty and unemployment, and in that context there’s a clear link between his and my research."

In the media, they occasionally say that’s why you’re opposed to the concept of a basic grant?
"They may say that, but that’s incorrect. You need to place these results in the proper context. To start, I believe there should be a certain balance. Perhaps programmes shouldn’t be made too generous, because then people are no longer prepared to work for a living. But they should be generous enough to prevent people from ending up below the poverty line. 

In the 1990s, our social security programmes were a lot more generous than they are today. The question is to which degree you can actually take these conclusions and apply them to the current situation. I mainly see it as a first step: what can we learn about how effects spread from generation to generation?"

In the best-case scenario, your research could actually ensure that more people have a job in the future? 
"It’s broader than that. What you’re seeing now is a growing inequality between the rich and the poor. If it turns out present-day policy has an impact on future generations, this should be taken on board. It is, at any rate, important to establish what the effects are. Ultimately, none of us wants inequality to increase further, and preferably we’d like to see it reduced. Not just in the Netherlands but in a lot of countries. I hope my research ultimately yields more handles that we can use to create more opportunities for people at the low end."

You will be speaking at the university’s dies natalis on 8 November. To which extent does your research tie in with Tinbergen’s body of work?
"I feel very honoured to have been asked. There’s a clear connection between Tinbergen’s ideas and my research. Tinbergen felt very strongly about addressing the world’s social ills; he had a pronounced focus on societal impact. He was involved in social problems like poverty and unemployment, and in that context there’s a clear link between his and my research. But my talk during the dies will be more general than that: what did Tinbergen do 50 years ago, and what are we doing today?"

Professor
Faculty
Erasmus School of Economics
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Anne Gielen will be speaking on 8 November 2019 during Erasmus University Rotterdam’s 106th dies natalis. This year’s event will be devoted to the ideas of the economist Jan Tinbergen. It is exactly fifty years ago that this Rotterdam professor was presented with the first Nobel Prize in Economics.