HAVE DUTCH MUNICIPALITIES BECOME MORE EFFICIENT IN MANAGING THE COSTS OF SOCIAL ASSISTANCE DEPENDENCY?*

ABSTRACT Many welfare reforms undertaken in Organization of Economic Cooperation and Development (OECD) countries are directed toward enhancing efficiency in the administration and implementation of social security. In this perspective, reforms in The Netherlands are an example of decentralization through budgeting financial means to municipalities. By using data envelopment analysis, we assess the effect of the introduction of the new Work and Social Assistance Act (WSA) in 2004 on cost efficiency. By applying a stochastic frontier analysis, we assess the impact of municipal policy strategies on cost inefficiency for the period 2005–2007. We find a clear positive effect of the WSA in 2004 on cost efficiency. Pursuing a strategy of activation raised efficiency significantly.     

The effect of congestion and agglomeration on multifactor productivity growth in Dutch regions

It is well known that labour productivity growth in Europe isslowing down, against an increasing growth rate in the US. TheNetherlands is one of the countries in Europe with the lowestgrowth rates of productivity. This article looks at this phenomenonfrom a regional perspective and presents the results of a growthaccounting exercise applied to regional industry data of TheNetherlands between 1995 and 2002. We find that slow productivitygrowth in The Netherlands is particularly situated in the economiccore regions and is caused by slow multifactor productivity(mfp) growth. A substantial part of this slow mfp-growth canbe explained by the fact that positive agglomeration advantagesare overruled by negative congestion effects caused by trafficjams.     

REGIONAL LABOR PRODUCTIVITY IN THE NETHERLANDS: EVIDENCE OF AGGLOMERATION AND CONGESTION EFFECTS*

ABSTRACT This paper studies the impact of localization, urbanization, and diversification on regional labor productivity levels and growth. We find substantial effects, accounting for roughly half of the explained variation in the labor productivity differences within the Netherlands in the 1990s. Diversification, urbanization, and localization effects are significant and positive for productivity levels. These levels appear cointegrated. The error correction specification of productivity growth surprisingly reflects negative agglomeration effects. From the theoretical model it follows that congestion effects must have taken precedence over agglomeration effects during this period. Both agglomeration and congestion effects are dampened by job density in neighboring regions. Finally, policy simulations with the estimated model show that spatial concentration is more harmful to national productivity growth than spatial dispersion.