Resolving Insolvency - Labour-Market Consequences of Personal Debt Restructuring

Wolter Hassink; Lotte Muller; Frans van Dijk; Frank van Tulder

doi:10.1007/s10645-025-09454-w

Resolving Insolvency - Labour-Market Consequences of Personal Debt Restructuring

Wolter Hassink, Lotte Muller, Frans van Dijk, Frank van Tulder

Water and Climate Risk

Research output: Contribution to Journal › Article › Academic › peer-review

Abstract

The paper investigates whether the Dutch Act on debt restructuring natural persons (WSNP) has an effect on the labour market outcomes of severely indebted persons. When participating in the programme, the indebted persons must be prepared to perform paid work activities, even though the income they may earn is below the social assistance benefit. If they fail the criteria of the programme, the debtors face bankruptcy. If they are successful, personal debts will be forgiven after a maximum of five years of wage garnishments. Our estimates indicate strong labour market effects of the debtors after applying for the WSNP.

Original language	English
Pages (from-to)	367-384
Number of pages	18
Journal	De Economist
Volume	173
Issue number	2
Early online date	25 Jun 2025
DOIs	https://doi.org/10.1007/s10645-025-09454-w
Publication status	Published - Jul 2025

Funding

We acknowledge the Netherlands Council for the Judiciary for its financial support. We are very grateful to two anonymous referees for their valuable comments on a previous version of the paper.

Funders	Funder number
Netherlands Council for the Judiciary

Keywords

Debt restructuring
Financial debts
Labour supply
Wage garnishments

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Resolving Insolvency - Labour-Market Consequences of Personal Debt Restructuring

Abstract

Funding

Keywords

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