Netherlands: What Labour Market Exclusion Costs the State
The direct fiscal burden of keeping people outside the labour market — benefit expenditure, lost tax revenue, and the structural cost to public finances across Europe.
Country Profile
Direct benefit payments
UWV Jaarverslag 2024 — WIA, Wajong, ZW uitkeringslasten; OECD SOCX 2023 · 2024
→ Disability pension
UWV Jaarverslag 2024 — WIA en Wajong uitkeringslasten · 2024
→ Sickness benefit
UWV Jaarverslag 2024 — Ziektewet uitkeringslasten · 2024
→ ALMP spend
SZW Begroting 2024 — actief arbeidsmarktbeleid · 2024
Estimated lost tax revenueestimate
Estimate: ~620k excluded working-age persons (WIA/Wajong recipients not in employment) × EUR 42k median earnings × 23% effective income tax rate. Source: CBS inkomensverdeling 2024.
Total estimated fiscal cost
Sum of direct benefit expenditure (UWV 2024) and estimated lost income tax. The Netherlands has Europe's highest WIA (long-term incapacity) inflow rate per employed person — a structural driver of the fiscal cost.
Local currency: 19 EUR bn
Per working-age adult
€2,083
Context
Netherlands disability benefit figures cover WIA (Wet werk en inkomen naar arbeidsvermogen), Wajong (young disabled persons), and ZW (Ziektewet — short-term sickness). The WIA inflow rate is approximately 1% of employed persons per year — the highest in Europe — making long-term fiscal cost a central policy concern.
Methodology
Sum of direct benefit expenditure (UWV 2024) and estimated lost income tax. The Netherlands has Europe's highest WIA (long-term incapacity) inflow rate per employed person — a structural driver of the fiscal cost.
In Practice
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