Resolving Insolvency - Labour-Market Consequences of Personal Debt Restructuring
Publication date
2025-07
Authors
Hassink, Wolter
Muller, Lotte
van Dijk, Frans
van Tulder, Frank
Editors
Advisors
Supervisors
Document Type
Article
Metadata
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License
cc_by
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.
Keywords
Debt restructuring, Financial debts, Labour supply, Wage garnishments, Economics and Econometrics
Citation
Hassink, W, Muller, L, van Dijk, F & van Tulder, F 2025, 'Resolving Insolvency - Labour-Market Consequences of Personal Debt Restructuring', De Economist, vol. 173, no. 2, pp. 367-384. https://doi.org/10.1007/s10645-025-09454-w