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.
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Institution 

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