Itinera Institute - Issues - Employment

Wage evolution and labour market

Mon, 26 Jul 2010 12:00:00 +0100

To what degree do shortages and surpluses on the labour market lead to wage increases and wage restraints respectively? The degree to which these labour market conditions affect wages is called wage flexibility. This report by the Research Department of the Flemish Government analyses wage flexibility in Belgium, its regions, its neighbouring countries and the EU15, both at an industry level and at a macroeconomic level.

Policy reform is ageing’s real challenge.

Wed, 07 Jul 2010 12:00:00 +0100

Marc De Vos vents his frustration at the occasion of the umpteenth annual report of Belgian Commission on Ageing. The preparation for Ageing has simply failed. The figures do not match. Only strong policy reform and a clear growth strategy can save us. We do not need commissions that calculate budgets, but rather commissions that advise on reform.

Reduce the complexity of the fiscal and parafiscal wage structure

Thu, 01 Jul 2010 12:00:00 +0100

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Refine and improve the application of the wage standard

Thu, 01 Jul 2010 12:00:00 +0100

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Make a "New Deal" for an agefriendly labourmarket, where working longer becomes more realstic, and early retirement dissapears

Tue, 29 Jun 2010 12:00:00 +0100

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Mobilise for diversity on the labour market

Tue, 29 Jun 2010 12:00:00 +0100

Stop wasting our human capital!

Tue, 29 Jun 2010 12:00:00 +0100

Marc De Vos condemns the widespread waste of Belgium’s only natural resource: human talent. In migration and integration, in education, and on the labour market waste is ubiquitous. We need a broad policy strategy for human capital, without dogmas. The clock of demography is ticking ominously.

Create individual career accounts

Mon, 28 Jun 2010 12:00:00 +0100

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Cut back in the amount of job schemes

Mon, 28 Jun 2010 12:00:00 +0100

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Towards a better and more modern single employment status for both blue collar and white collar workers

Mon, 28 Jun 2010 12:00:00 +0100

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Turn temporary unemployment into a volontary insurance regime, combined to activation

Mon, 28 Jun 2010 12:00:00 +0100

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Europe 2020 and Belgium: the challenges

Mon, 21 Jun 2010 12:00:00 +0100

What do we have to do in order to achieve a better and sustainable growth after the crisis? What are the main challenges in our social and economic policy? What choices does Belgium have to make after the federal elections of June 13th? The European Commission aims to inspire with the “Europe 2020” strategy. During a conference day organised by the Itinera Institute and the European Commission, prominent speakers from the political, economic and academic world debated on the main themes of this European strategy and its application in Belgium.

The impact of age on the reservation wage

Thu, 27 May 2010 12:00:00 +0100

How can we stimulate older workers to stay longer in the labour force? What is the minimum wage employers have to offer for them to accept a job? Age influences the willingness to work and the ease of movement on the labour market. In this report from the Steunpunt Werk en Sociale Economie (KUL), the author uses these two employability concepts and their relation with age to analyze the relation between age and the reservation wage. This relation is complex but helps us to better tackle the ageing challenge.

The figures of realism on budget and ageing

Fri, 21 May 2010 12:00:00 +0100

Marc De Vos explains how Belgium faces a daunting budgetary challenge, with major austerity in the short-run and the need for budget surpluses in the medium term. At the same time, structural reforms in social security are inevitable and economic potential must improve, while state reform will crown it all. The following government will be on of blood, sweat, toil, and tears.

How Do Labour Markets Affect Crime?

Thu, 06 May 2010 12:00:00 +0100

For nearly 50 years academics have been studying how labour markets affect crime. This literature is characterized by an intriguing puzzle – the large gap between the theory and empirical work. To solve the puzzle, this IZA paper discusses a few very important empirical problems that until the last 10 years have not been systematically addressed. The author concludes that recent research consistently provides evidence to buttress the contention that labour market opportunities have important effects on crime, especially property crime.

China can also be Belgium’s locomotive

Tue, 27 Apr 2010 12:00:00 +0100

Marc De Vos identifies three big trends in our post-crisis world. Slow growth, high unemployment and public debt are the West’s destiny. But the developing countries are a bright spot for us. China & co are not only competitors, but increasingly also our potential customers.

Labour market policies for seniors

Wed, 14 Apr 2010 12:00:00 +0100

To reach the Lisbon objective of a 50% employment rate for workers older than 55, in 2007 Flanders developed labour market policies for seniors. This report from the Steunpunt WSE evaluates the performance of these policies and shows the aspects to improve. Between 2001 and 2009, the employment rate for the 55-64 year old workers has increased from 25.3% to 35% in Flanders. The demographic challenge will require those type of improvements all over the country, however.

Active labour market policy

Mon, 12 Apr 2010 12:00:00 +0100

Over the last two decades, active labour market policies (ALMP) have developed significantly in many OECD countries and budgetary investments have followed accordingly. This paper from the Sixth Framework Programme (EC) investigates four types of ALMP: incentive reinforcement, employment assistance, occupation and human capital investment. It studies the ones implemented in six Western European countries over the last twenty years and shows how political, institutional and ideational determinants influenced them. Here is another occasion to learn from our neighbours’ experiences.

Economic growth is the most important policy priority

Wed, 17 Mar 2010 12:00:00 +0100

Marc De Vos comments the pitiful socio-economic situation in Belgium. In the next years, each government will have three inevitable priorities: budgetary recovery through saving and taxation, economic recovery with more growth and jobs, and a fundamental social security reform, both in the organization and in the financing. Economic recovery is the most important, but it also requires a mentality shift from politicians and administrations.

Retire later or work harder?

Thu, 25 Feb 2010 12:00:00 +0100

The guaranty of future pensions’ payment is strongly related to the participation rate on the labour market. According to this IZA report, we will either have to work harder or work longer if we want to increase this rate. Both options influence employers’ decisions to invest in human capital, but will in the first place depend on a number of workers’ characteristics (job satisfaction, need of money, etc). The authors investigate the British labour market and present this trade-off both theoretically and empirically and its impact on labour input.

Performance related pay in employment services

Mon, 15 Feb 2010 12:00:00 +0100

Activation policies often reward job seekers finding a job. In this study of the The Danish National Centre for Social Research, the authors advocate rewarding employees in the employment administration too. Performance related Pay (PRP), as this is called, seems to promote employment chances of social clients. Especially it seems that PRP schemes with collective monetary payoffs have a positive effect.

The single employment status is much more than a redundancy story

Thu, 11 Feb 2010 12:00:00 +0100

A large number of labour experts argue for a new dismissal law, that combines income protection and reemployment. The single employment status for blue collar and white collar workers needs to do more than harmonizing: it needs to modernize. That is in the interest of social justice as well as the ill Belgian labour market.

Labour market and investment in human capital in Europe

Thu, 04 Feb 2010 12:00:00 +0100

High levels of taxation and generous welfare state arrangements tend to decrease labour force participation, hours worked and thereby the returns on human capital investments. Low skilled and older workers are the first concerned by this phenomenon. What can we do to improve their participation rate in the labour market? This IZA report suggests to reduce labour market distortions. But it mainly recommends to reformulate activation and training policies in order to increase the utilization and the maintenance of human capital during the working life.

When will Belgium let unwillingness and incapacity behind her?

Thu, 04 Feb 2010 12:00:00 +0100

Marc De Vos makes some New Year reflections about the state of Belgium. In his view, we had a lost decade with unwillingness and incapacity. First, change will come step by step. The federal elections pulse will then really be necessary to put an end to incapacity.

Opel Antwerp marks the unbearable comeback of the economic nationalism

Mon, 25 Jan 2010 12:00:00 +0100

Marc De Vos points out how Opel Antwerp’s destiny is both an economic and politic story. Politics has a big influence on multinationals’ restructuring, but Belgium had to give up in front of big countries like the US and Germany. Europe needs to put an end to the politization phenomenon and to economic nationalism as soon as possible.

Another job scheme is not the best way to tackle unemployment

Thu, 21 Jan 2010 12:00:00 +0100

Marc De Vos considers the new job scheme as a step in the good direction, but warns us about its perverse effects. The related budget should have been better spent via individual career guidance.

Social security systems: Responding to the crisis

Mon, 18 Jan 2010 12:00:00 +0100

Social security systems have been negatively affected by the current financial and economic crisis. Financial portfolios have been undermined by slumping markets and negative investment performance. Increasing unemployment has reduced contribution revenues while expenditure on benefits has increased. On the basis of recent evidence, this ISSA publication argues a need for the better design and coordination of social security systems and for broad-ranging national and international collaboration to respond more effectively to the social and economic challenges posed in times of crisis, and beyond.

How expensive is the welfare state?

Tue, 15 Dec 2009 12:00:00 +0100

This report first presents information on trends and composition of social expenditure across the OECD. After accounting for the impact of taxation and private benefits, social expenditure amounts to over 30% of GDP in Belgium. According to this OECD report, that is amongst the highest percentages in the world. Since 1990, growth in real social spending has outpaced real GDP growth in most OECD countries which could put unsustainable pressure on our much appreciated welfare model. Another wake-up call for structural reforms?

The single employment status for both blue collar and white collar workers needs to be better and more modern

Mon, 07 Dec 2009 12:00:00 +0100

The discussion about a single employment status between both blue collar and white collar workers can not be limited to a discussion about the redundancy period. We need a better dismissal regulation that promotes employability. That is the only way to manage ageing. Here is a project for a more modern dismissal regulation in line with foreign experience. When are we going to also adopt in Belgium a vision in favour of a better labour market?

Employment in Europe 2009

Tue, 01 Dec 2009 12:00:00 +0100

Since the beginning of the crisis, employment in the EU has decreased by over 4 million jobs. This European Commission report analyzes the recent developments and the dynamics of European labour markets. Are we going to manage the exit of the crisis? This report is confident about it. The move towards a low-carbon economy will indeed allow us to compensate for future job losses caused by the economic crisis. There is potential there and we could start by developing training policies for green technologies for example.

Activating labour market policy: lessons from abroad

Wed, 25 Nov 2009 12:00:00 +0100

An aging population and a growing number of (long term) unemployed will have social security expenses go trough the roof. An activation policy which seeks to replace obstacles to the labour market by incentives, tries to formulate an answer to this imbalance. An activating labour market policy is a set of measures whose objective is to fight unemployment, to encourage the outflow towards a job and to improve the connexion between supply and demand on the labour market. In this article from the Steunpunt WSE the authors discuss several interesting experiences from abroad.

Does the welfare state make older workers unemployable?

Tue, 03 Nov 2009 12:00:00 +0100

European labour markets are more regulated than Anglo-saxon ones. But how are ‘continental’ older workers affected by labour market rigidities? Are higher wages for the elderly the main cause for relatively more dismissals among older workers compared to their younger peers? Should they therefore benefit from even more protection than they already do? This IZA discussion paper makes a comparison between a rigid and a flexible labour market (France vs the US) and discusses the pros and cons of both systems for older workers.

Tax Credits to Prevent Layoffs and Stimulate Employment

Mon, 26 Oct 2009 12:00:00 +0100

While there is much talk about the economy potentially being in recovery, it must be noted that we still have an extraordinarily high unemployment rate. This will continue for years to come unless we act decisively to confront the issue. In this CEPR analysis the authors suggest a job sharing tax credit as an effective temporary measure. The basic point is simple: job sharing would use tax money to pay firms to shorten the typical workweek or work year, while keeping pay constant. An idea worth scrutinizing for the troubled Belgian labour market.

Flexicurity : a proposal based on economic principles

Thu, 15 Oct 2009 12:00:00 +0100

Do workers receive fair compensation when losing their job? Do employers who dismiss workers contribute sufficiently for the costs transferred to society? In this publication from “Regards économiques” (UCL), the authors review the economic principles of dismissal and suggest a new employment protection legislation and unemployment insurance. In their proposal, laid off workers are properly compensated for psychological costs and encouraged to get back to work with the help of labour policies financed indirectly by the dismissing employers.

Motivation for training in Flanders investigated

Tue, 29 Sep 2009 12:00:00 +0100

A modern labour market cannot pass by training. This is why the Lisbon strategy aims at a training participation rate of the working population of 12,5%. With a mere 8%, Flanders is far from reaching that European objective. In this report from the Steunpunt WSE, the researchers analyze what motivates employees to take part in training programs, and what motivates employers to invest in them. This insight could increase the training participation rate in our region in order for our labour market to be more adequately equipped to face the challenges of the 21st century.

School-to-work transitions in the United-States and in Europe

Mon, 14 Sep 2009 12:00:00 +0100

How can temporary work influence the performance of youth on the labour market? What are the pathways to chose from to minimize the risk of unemployment? How can the government and companies help them in this sense? In this OECD report, the authors make an analysis of school-to-work transitions in Europe and the United-States. For both continents, they investigate the time needed to find a first job after completing education, the smoothness of the transition and the extent to which such an easy transition may determine future labor market success.

The challenges for the Belgian voucher payment system for services

Mon, 17 Aug 2009 12:00:00 +0100

Vouchers have increasingly become a common mode of payment for personal services in Belgium, with a 53% increase in use during the period 2006-2007. They take part in policy to finance the demand for services and bring undeclared labor in the official labor market. But are vouchers an effective means for those goals? This article from the European Trade Union Institute investigates the drivers for the development of personal services and evaluates the payment method with vouchers. The author compares the Belgian and French systems and determines the challenges that lie ahead for both systems concerning the cost, and the quality of employment.

Young people on stage

Fri, 17 Jul 2009 12:00:00 +0100

In order to take advantage from the crisis, Jean Hindriks suggests a Sweden knowledge lift. Active workers could go back to study, while receiving benefits, to let their job to younger workers, the first victims of the crisis.

Reform of the labor market policy in Belgium

Tue, 14 Jul 2009 12:00:00 +0100

What does the ideal labor market policy look like? This paper of the CESifo proposes a reform of the labor market in Belgium, based on economic principles. The authors sum up the pitfalls of the current system and argue for the implementation of a new layoff tax. The guidelines that are provided for a new reform indicate that the current policy lies far from the ideal.

The effect of age on productivity investigated

Tue, 14 Jul 2009 12:00:00 +0100

As employees become older they become more experienced, yet their health and strength declines as well. The general presumption is that aging implies a decline in productivity, but does that hold true? In this paper of the Institute for the Study of Labor (IZA) data is examined from running contests, output of publications and firms. The author finds differences in the effect of aging on mental and physical productivity which might differ with your expectations.

Does Flanders need additional stimulus measures?

Wed, 08 Jul 2009 12:00:00 +0100

On-the-job training is seen as an important driving force for a knowledge-based economy with a dynamic labor market. Should the government stimulate investments in on-the-job training? And is there need for new stimulus measures in Flanders? This report of the ‘Steunpunt Werk en Sociale Economie’ explains the motives for government intervention and the different implementation possibilities. The author provides pros and cons for new stimulus measures in Flanders and draws conclusions which can direct the debate on government policy.

Activation policies in some European countries

Fri, 26 Jun 2009 12:00:00 +0100

Activation policies are an efficient tool to fight unemployment, to motivate people to keep on working and to improve the matching between supply and demand on the labour market. This publication from the Higher Institute for Employment discusses activation policies adopted by our European neighbors (France, Germany, Nederland, Denmark, and the United-Kingdom). Thanks to a better view of what works abroad, and what doesn’t, Belgium can reevaluate its own activation instruments in terms of training, assistance to unemployed people, private sector subsidies, job creation, etc.

Deficit spending can not push away political reforms

Fri, 26 Jun 2009 12:00:00 +0100

Marc De Vos sends out a warning about the Flemish budgetary laxity. Flanders can not exorcise the crisis with regional deficits. The new government has to prioritize competitiveness, innovation, education, entrepreneurship and exports.

Wage inequalities in perspective

Fri, 26 Jun 2009 12:00:00 +0100

Top wages and wage differences have become a prominent news item. With the threat of a collective impoverishment caused by the crisis, intolerance towards high earners is significantly increasing. But how important are wage differences in Belgium and how important are they compared to our neighbouring countries? In this policy brief, Kris Boschmans, Geert Janssens en Wies Pairoux from the think-tank VKW Metena reflect on the desirability of healthy wage differences. They show that the fuss around top wages completely misses the far more important debate of the wage base determination process in our country.

Transition policy is the marching order for labour market policy in times of crisis

Mon, 22 Jun 2009 12:00:00 +0100

Marc De Vos sends out a warning that the crisis policy on the labour market is focussing too much on keeping existing jobs. The attention should be focussed on the weaker groups on the labour market. Transition policy is the way forward, and can seize the existing opportunities, despite the crisis. We have to make a collective effort for actual activity in order to avoid a lost generation.

No sustainable social security without a better economy and a better labour market

Fri, 19 Jun 2009 12:00:00 +0100

Marc De Vos has objections about the ambition for a Flemish social security. He points out that Flanders can not get a sustainable social security without a larger economic basis and a better labour market. Flanders needs to be a laboratory for a new and better social security.

Employment-productivity trade-off and labour composition

Thu, 11 Jun 2009 12:00:00 +0100

Labour market reforms may have the objective to increase employment rates, especially those of low productivity workers. Overall labour force productivity could however deteriorate with such kind of reforms. The authors of this OECD report study the trade-offs between labour productivity and labour force utilization for different socioeconomic groups. How can we increase employment without becoming less competitive than the US and the rest of Europe? Education appears to be a non negligible remedy to reconcile employment and labour productivity growth.

The Day After: what are the regional policy priorities for 2009-2014

Wed, 10 Jun 2009 12:00:00 +0100

The regional elections of 2009 should be a turning point. Due to the economic crisis, the budgetary crisis and the institutional crisis, Belgian’s regions are faced with new responsibilities. Now that the votes are counted, the multitude of electoral promises can make way for the reality of negotiations. The Itinera Institute determined 7 regional policy priorities and formulated concrete proposals.

Presentation: the day after: what are the regional policy priorities 2009-2014?

Mon, 08 Jun 2009 12:00:00 +0100

Executive summary :the day after: what are the regional policy priorities for 2009-2014?

Thu, 04 Jun 2009 12:00:00 +0100

GM and Opel undermine the real economy fundamentals

Thu, 04 Jun 2009 12:00:00 +0100

Marc De Vos points out heavy perverse effects from GM’s nationalization and Opel’s government support: politization of the auto industry, unfair competition and a slide towards more economic nationalism. The rescued companies’ future is still very uncertain. The rare tax revenues are not well used.

Service cheques: a different evaluation

Wed, 20 May 2009 12:00:00 +0100

Established since 2004, the service cheques system has been, among other things, associated with job creation (87 152 jobs created according to a 2007 estimation from the Belgian Court of Audit). In this edition of “Regards Economiques”, however, economists from the University of Louvain investigate job and service organization quality for the different types of providers. They also question the financial viability of such a system depending on a double state intervention (VAT exemption and tax reduction for the users). And, what would the impact of service cheques’ price increase be?

European Quality of Life Survey

Tue, 05 May 2009 12:00:00 +0100

This survey from Eurofound gives European citizens the opportunity to express themselves on different socio-economic topics such as income and living standards, work-life balance, quality of society, healthcare and housing. This allows us to evaluate the quality of life throughout Europe better and to think about relevant policy measures in meeting people’s needs. We can also find inspiration here from what is going better abroad, particularly in the Nordic countries.

Labour in Belgium ; without any reform, there is no reason to celebrate (not even on May 1)

Tue, 05 May 2009 12:00:00 +0100

Also Belgium celebrates Labor Day on May 1. However, during the rest of the year work is being far from celebrated in our complex welfare state. A heavy tax system, a rough regulation, and all kind of inactivity traps discourage the supply of labor. With the crisis, the invoice related to our heavily upset labor market goes up, but fundamental reforms are still out of the question.

The effects of the population structure on employment and productivity

Tue, 05 May 2009 12:00:00 +0100

Employment rates and productivity levels vary across population groups. This OECD report analyzes the differences in employment and productivity in several European countries and in the United States. Countries with a large share of young people at working age or low educational attainment can be expected to have lower aggregate employment rates and be less productive than countries where the shares of the prime-age population and the higher-educated are important. These findings should push us to think more seriously about the importance of upgrading skills and developing more efficient technologies. Our long run employment and productivity performances are really at stake.

Labour flows in Belgium

Mon, 27 Apr 2009 12:00:00 +0100

In the last decade, job stability was relatively high in Belgium and there was no deterioration on the Belgian labour market in terms of job mobility. But is this still going to be the case in the following years? This report from the National Bank of Belgium presents an accurate analyze of job flows from 1998 to 2006 in our country. The authors show us to what extend job flows vary with firm, worker and labour market characteristics. Good to know when defining policies aimed at slowing down job destruction and stimulating job creation.

Public employment in an international perspective

Mon, 27 Apr 2009 12:00:00 +0100

How many people are employed in the Belgian public sector? How much does this cost to our government? Does Belgium manage its public sector differently than other OECD countries do? In this report, the Plan Bureau gives us a concrete answer to all these questions, with interesting figures. It allows us to have a better idea of what the public sector represents in terms of jobs and costs in Belgium and other OECD countries. Even if the public employment rate in Belgium is higher than average compared to similar countries, this is not the case for the ratio between gross remuneration per civil servant and gross remuneration per worker in general.

Bismarckian Welfare State

Fri, 03 Apr 2009 12:00:00 +0100

Compared to Anglo-Saxon and Scandinavian socio-economic models, our Bismarckian-type welfare regime is in fact not as bad as we might have thought. This report from IZA shows that countries with such welfare systems can be as successful in terms of employment and poverty reduction. The authors analyze employment rate evolution between 1997 and 2007 as a measure for judging the sustainability of the Bismarckian welfare state and the success of social and economic policy reforms. In some countries like Belgium however, we should put extra effort into the employment rate of older workers.

Stubborn youth unemployment in Belgium

Mon, 30 Mar 2009 12:00:00 +0100

What kind of situations, problems and challenges are young, long time unemployed facing in Belgium? This report of the King Baudouin Foundation draws an comprehensive sketch of this very vulnerable group. Concrete recommendations for a successful activation policy for the young are also made – this proofs the need for custom-made measures. Now, Belgium needs a legislative framework that transforms activation into a true pillar.

Only systemic reforms can make social security sustainable

Fri, 27 Mar 2009 12:00:00 +0100

For Marc De Vos, it is “game over” with the preparation of ageing in Belgium. Our social security is not sustainable. The budgetary situation needs fixing, but only policy reform can save us. We urgently need a broad societal consensus on a new socioeconomic model.

Plea for a new dismissal law

Mon, 23 Mar 2009 12:00:00 +0100

Marc De Vos stresses that the harmonisation of dismissal law for blue collar and white collar workers has to serve two priorities: equal rights and labour market circulation. We need to combine income security with tailor made reemployment. Individual career accounts with continuous funding can be a useful tool to achieve that goal.

Stabilization effects of social spending

Fri, 20 Mar 2009 12:00:00 +0100

What is the ability of social spending to smooth output shocks and to provide economic stabilization? The results of this OECD working paper show that overall social spending is able to smooth about 16% of a shock to GDP. More specifically, social spending devoted to ageing and unemployment appears to have the most important effects. Moreover – and this is good news for Belgium given today’s negative output shock – the stabilization effects of social spending are significantly larger in those countries where the size of social spending is high.

Does size matter for growth?

Wed, 18 Mar 2009 12:00:00 +0100

Now that people are massively losing their jobs, people might wonder whether their job is safer with a small or a larger employer. This Yale University working paper provides new evidence that large firms are more sensitive than small ones to business cycle conditions like recessions or expansions. Larger employers shed proportionally more jobs in recessions and create more of their new jobs late in expansions. Eventually, these effects cancel themselves out. This confirms that innovation, not size, is important for growth and job creation.

Video Column : Temporary unemployment for employees

Tue, 17 Mar 2009 12:00:00 +0100

Should the the system of temporary unemployment be extended to employees? Marc De Vos lists the pros and cons, and argues for a temporary - temporary unemployment.

Flexibility on the Belgian labor market

Thu, 05 Mar 2009 12:00:00 +0100

In a period of crisis, the issue of work flexibility is often put on the table. But has Belgium been able to develop a labor market that is flexible enough? In this DULBEA report, the authors study the different types of work arrangements in Belgium since 1990. According to their data, work flexibility could still be improved which would soften transition out of the crisis and stimulate workers in having longer careers. Two birds, one stone.

Temporary jobs and job search in Europe

Wed, 25 Feb 2009 12:00:00 +0100

What reform could help reduce today’s unemployment level? The relaxation of employment protection systems by allowing firms greater freedom to create temporary jobs does not seem to be unanimously accepted. This IZA publication investigates the impact of contract duration on worker’s search effort for a job. It is concluded that temporary jobs in Belgium and other European countries can give incentives to look for a permanent job, given that the number these temporary contracts is not too high and their duration not too long.

Are young and old workers harmful for firm productivity?

Fri, 13 Feb 2009 12:00:00 +0100

If it wants to respect the Lisbon Strategy, Belgium needs to increase its employment rate either for people aged 55-64 (the lowest in the OECD: 34% in 2007) or for younger people. In the light of an ageing population, giving incentives to older workers not to retire too early seems evident. But will large firms, mainly the ICT industry, go for it? According to this IZA publication, these firms would younger workers over older ones as increasing in the share of younger (older) workers has a positive (negative) impact on firm productivity.

Cheaper Child Care, More Children

Fri, 13 Feb 2009 12:00:00 +0100

An extended labour force is the way to counter the pernicious effect of ageing. There are two ways to increase labour supply: on the short term, immigration can be a temporary solution, but on the long term the birth rate would have to go up eventually. Given the high labour force participation of mothers, the latter should not be taken for granted. According to this IZA publication based on Swedish data, child care policies can improve fertility and, later, expand the labour force.

Temporary unemployment is not the solution

Fri, 13 Feb 2009 12:00:00 +0100

Marc De Vos underscores the perverse effects of temporary unemployment and proposes to reform it into an insurance system that internalizes the costs and pays more attention to activation. A transparent single employment status for both blue collar and white collar workers is the road to a clean combination of flexibility and security.

The impact of offshoring on employment in Belgium

Fri, 13 Feb 2009 12:00:00 +0100

Too often, offshoring is accused of being responsible for destroying jobs. According to this report from the Bureau du Plan, we should reconsider our judgment. Indeed, it appears that offshoring in the industry had a very low impact on overall employment between 1995 and 2003.

Labour market policies exercice I

Mon, 12 Jan 2009 12:00:00 +0100

Employment growth is often associated with lower average measured labour productivity growth as more low-skilled workers enter the workforce. However, policies can also have sizeable direct effects on individual productivity levels and/or growth by creating incentives for workers to invest in training, facilitating reallocation of resources (through employment protection legislation for example) to their most productive uses and generating or maintaining high-quality job matches. In this paper, Bassanini and Venn analyze the impact of such labour market policies on productivity in OECD countries.

Labour market policies and productivity

Fri, 09 Jan 2009 12:00:00 +0100

Optimizing age-dependent employment protection

Fri, 09 Jan 2009 12:00:00 +0100

The question how we intend to keep our older workers active is an important one if we want to keep the welfare state as we know it affordable. One suggestion to do so is to introduce age-dependent employment protection. According to this IZA publication, theory of age-dependent employment protection implies of implementing age-decreasing firing taxes for the older workers. That way, job creation is maximized and job destruction minimized, the author argues. Surprisingly this is at odds with the current practise in Belgium and most OECD countries, which have implemented an age-increasing employment protection.

Synopsis Newyear memo

Fri, 09 Jan 2009 12:00:00 +0100

New Years memo : Presentation

Tue, 06 Jan 2009 12:00:00 +0100

The Itinera Institute presents it's NEW YEAR's MEMO 2009, our vision of the policy priorities for the Van Rompuy I Government.We stress the importance of the current legislation, and formulate a list of recommendations for bold, proactive policy choises.

New Years Memo 2009

Tue, 06 Jan 2009 12:00:00 +0100

The Itinera Institute presents it's NEW YEARS MEMO 2009, our vision of the policy priorities for the Van Rompuy I Government. We stress the importance of the current legislation, and formulate a list of recommendations for bold, proactive policy choises.

Video: a solid and visionary labour market

Tue, 06 Jan 2009 12:00:00 +0100

Video: New Years Memo

Tue, 06 Jan 2009 12:00:00 +0100

(Un)employment of foreign workers in Belgium

Mon, 29 Dec 2008 12:00:00 +0100

At the international level, Belgium is one of the countries where the disparities between immigrants and nationals on the labour market are the highest: lower employment rate and higher unemployment rate than nationals, more temporary and partial work and overrepresentation in the blue-collar workforce. What is to blame? Several factors like training differences, asymmetric information or unemployment traps. This report from de General Directorate for Employment therefore implicitly concludes that a good activation policy would be a good integration policy.

Collective bargaining level and wages

Fri, 12 Dec 2008 12:00:00 +0100

In Belgium industry agreements are complemented by firm-specific agreements. This DULBEA working paper provides a critical survey of the literature on effects of this two-tier bargaining system on the structure of wages in Europe and more particularly in Belgium. It is found that firm-level agreements have a positive and significant effect on workers’ wages. The impact on the dispersion of wages, however, is ambiguous. The degree of centralisation of the negotiations also appears to be a key factor here.

No economic recovery plan without recovery plan for ageing !

Fri, 12 Dec 2008 12:00:00 +0100

Marc De Vos stresses the need for efficiency and budget limits in the race for economic recovery plans. The government should not announce a recovery plan without clear prior budgetary goals. Every recovery plan for the economy should be tied to a subsequent recovery plan to compensate for the delay in budgetary preparation for ageing.

Why social partners and government fail with the centralized wage bargaining

Thu, 11 Dec 2008 12:00:00 +0100

Marc De Vos points out that the new central bargaining agreement does not achieve its purpose of guaranteeing competitiveness. The government moreover encourages more than it corrects. The system of negotiated wage moderation fails.

A well-considered labour market policy

Tue, 09 Dec 2008 12:00:00 +0100

During the 70’s, we thought we could reduce unemployment by sending older workers on early retirement. Today, some people still believe that the retiring baby boomers will release jobs easily accessible to the youngsters for whom everything will have become much easier. Apparently, people are reluctant to see that when people leave the labour market, the cake gets smaller so that these jobs will not necessarily be transferred to others.

Childcare in Belgium and women’s employment rate

Fri, 05 Dec 2008 12:00:00 +0100

With an employment rate for of 55.3% for women in 2007, Belgium is still far from the 60% objective fixed by the Lisbon Strategy. Childcare is a key factor for women when considering their position on the labor market. This report from the ULB analyzes the situation and comments on how the public authorities try to improve childcare structures – and by doing so female employment.

Employment and migration in Europe

Fri, 05 Dec 2008 12:00:00 +0100

According to this European Commission report, migrants have made a strong contribution to recent labor market performance of the EU, addressing labor and skill shortages and increasing flexibility. Nevertheless, there remain considerable challenges regarding the adequate integration of migrants into the labor market in particular with regard to quality of employment and effective use of their human capital, the authors argue. With only one out of tree migrants working, this is particularly true for Belgium.

Belgium’s recovery plan must focus on policy reform

Fri, 28 Nov 2008 12:00:00 +0100

Marc De Vos explains that the European recovery plan does not turn back the clock of economic history. He underscores that Belgium has little room for a Keynesian stimulus. The priority for Belgian policy is policy reform that saves money or at least does not cost money.

Privatization and changes in the wage structure

Fri, 21 Nov 2008 12:00:00 +0100

With the financial crisis and the government’s subsequent increased role in the economy, the question whether to privatize firms or not is certainly as relevant now as it was under Thatcher. The first to be affected by those kinds of decisions are the workers of the considered firms. This IZA publication for example found that wage and wage growth distributions widened significantly after privatization. The central questions really remain however who the winners and the losers are and why?

Active labour market policy: synergies and trade-offs

Mon, 17 Nov 2008 12:00:00 +0100

What benefits can be attained from an active labour market policy? Author Røed investigates and found that an active labour market policy is not only good for finding a job, but also for the quality of the job found. Choices still need to be made though: higher unemployment benefits, for example, increase the quality of the found job, but also the length of the period of unemployment. Activation measures boost the probability of finding a job quickly, but diminish its expected allowance.

The civil servant and the unemployed

Mon, 17 Nov 2008 12:00:00 +0100

When jobs in the private sector are not competitive anymore, public employment is an easy option to make sure people have a job. This is the Scandinavian model. But a better solution is to subsidize employment, as service coupons in Belgium are successfully doing by creating 65.000 jobs.

Effect of tax reduction on job vacancy and unemployment

Mon, 10 Nov 2008 12:00:00 +0100

The unemployment rate in Belgium remains relatively high with respect to other European countries. However, some job vacancies are still open. This nota realized by the KUL analyses the possibility of reducing fiscal pressure in order to solve these two issues. It also makes a comparison between Belgium and Denmark by examining the influence some factors like education and transfers may have on the unemployment rate.

A new dismissal regulation is necessary

Mon, 03 Nov 2008 12:00:00 +0100

Marc De Vos reacts against the demand of the employers’ organisation to limit the redundancy period for blue collar workers. We need a new dismissal regulation that promotes employability and where the redundancy period is only one pillar. Not higher or lower, but different, that is the message.

In-work poverty is weak in Belgium

Mon, 03 Nov 2008 12:00:00 +0100

This paper regards the incidence of in-work poverty and how it is reduced by the payment of social transfers in 20 European countries. Belgium appears as the country with the lowest pre-transfer in-work poverty and is ranked third regarding post-transfer in-work poverty. The paper attributes this to a high level of bargaining centralisation and to generous social benefits.

The wage disparities progress

Mon, 03 Nov 2008 12:00:00 +0100

According to this report from the International Labour Organisation (ILO), the financial globalisation contributes to increasing the wage disparities. It argues that income disparities have increased, notably under the influence of "performance based payment systems”. Without surprise, Belgium shows wage gaps among the lowest in comparison with other advanced economies. Between 1990 and 2000, it is however the country which shows the strongest progress of the disparities, with Finland and Sweden. To be closely watched.

Marx, Darwin or Marx..?

Tue, 21 Oct 2008 12:00:00 +0100

With the financial crisis, capitalism is under attack and in need of solutions. Johan Albrecht wonders whether Marx or Darwin could help.

Working against moonlighting

Fri, 17 Oct 2008 12:00:00 +0100

This report from, the result of a collaboration between Liège University and Leuven University, tries to sketch a picture of the size and evolution of moonlighting in Belgium. According to the authors, clear political will and the unambiguous support of the trade unions and the employers’ federations are needed to fight moonlighting. We would have a better understanding of this hidden reality and we’d observe a more efficient control – with all the positive budgetary consequences that this implies.

Labour in the future

Mon, 13 Oct 2008 12:00:00 +0100

Labour and ideas about labour have changed a lot over time. In times of important demographic change, labour is given an even more important place in the societal debate and one’s individual life path. This report from the Netwerk Toekomstverkenningen painted four possible scenarios of how labour could evolve in the future, each with its own array of opportunities and problems. The key question is whether we’ll have to work to live, or live to work? It will probably be something in between but it will most certainly be different.

Main street after the meltdown

Fri, 10 Oct 2008 12:00:00 +0100

The financial crisis in bringing havoc but the real economy can sustain as long as competitiveness remains pivotal for policymakers.

The labour market can benefit from a greener economy

Mon, 06 Oct 2008 12:00:00 +0100

According to the International Labour Organisation (ILO), the green growth is promising for the labour market: 2 to 3,5 millions jobs could for example be created in Europe and in the United States if big energy efficiency construction sites were launched in the construction sector. This is what comes out of this report which estimates, at the horizon 2030, the job creation potential from a shift towards a less polluting economy. ILO agrees however that the evolution towards a green economy may encounter financing and manpower problems in several developed countries.

Slender, obese or unconstrained? An analysis of public employment in Belgium between 2001 and 2007

Mon, 29 Sep 2008 12:00:00 +0100

Public employment did grow by 11.75% in Belgium while the growth of total employment was 6.1%. In Flanders, public employment is bigger than inFlanders How sustainable is this evolution?'

Entrepreneurship as a source of wealth

Mon, 22 Sep 2008 12:00:00 +0100

Some entrepreneurs chose for the profession out of necessity while others made a deliberate choice in order to grasp a business opportunity. For the first group, push factors like the small amount of job opportunities triggered by a high unemployment were a sufficient motivation. This can probably explain why Flanders’ part of self employed is higher than in Wallonia compared to total population, but not compared to the working population. The employment rate is just lower in the south of the country.

Temporary agency work as a transition for a more efficient labour market? Reflection.

Mon, 22 Sep 2008 12:00:00 +0100

Following the lecture of Jan Denys, Randstad, of the 17th of September, Fons Leroy, VDAB, answers.

Temporary Agency Work as a Transition for a more efficient Labour Market?

Wed, 17 Sep 2008 12:00:00 +0100

Temporary agency work has known an important expansion during the last 40 years. Today, 3,3 million agency workers are employed on a daily basis in the European Union. In 2012 they will be 5 million. The penetration rate is the most common indicator to measure the impact of agency work on the labour market. This indicator compares the share of agency workers with the total number of employed people. Belgium has a penetration rate of 2,5%. In this contribution we want to measure the impact of agency work in another way. We apply the concept of the transitional labour market, developed by the German sociologist Gunther Schmidt. The transitional labour market model focuses on the transitions between school and education, work, unemployment, inactivity (household activities) and retirement. A smooth transition between these different activities is an important feature of a well-functioning labour market. We will examine the the role of agency work in these different transitions. Traditionally, agency work is considered as important in the transition from school to work and from inactivity to work. Our analysis of the Belgian situation shows that agency work is crucial in the transition from work to work as well. In this contribution we try to benchmark Belgium on an international basis.

The Danish Employment Miracle

Fri, 05 Sep 2008 12:00:00 +0100

Flexible hiring and firing rules, generous unemployment insurance and an active monitoring and assistance of the unemployed; those are the main elements of the Danish Flexicurity model that several Belgian politicians cite as a solution for our high unemployment rate. Many researchers stress the importance of the activation policy towards the unemployed. Others on the contrary, can not find a direct positive effect of specific assistance programs on employment. This paper builds a bridge between both views by showing that the motivation of the unemployed to find a job, ultimately comes from the threat to have to attend such an assistance program.

Employment assimilation of immigrants in the Netherlands: Catching up and the irrelevance of education

Mon, 01 Sep 2008 12:00:00 +0100

This Iza study examines employment assimilation of immigrants in The Netherlands. The authors observe marked differences between immigrants by source country: Predictably, non-western immigrants never reach parity with native Dutch, but even the second generation immigrants never fully catch-up. On the contrary, the western, immigrants seem to face no considerable difficulties on the Dutch labour market. The most striking result is however that education is irrelevant for socio-economic position of immigrants once the country of origin has been controlled for, suggesting that immigrants are still subject to discrimination.

German reforms pay off

Fri, 22 Aug 2008 12:00:00 +0100

A recent OECD study found that only Italy and Turkey do worse than Belgium regarding the participation of elder employees on the labour market. So, if Belgium wants to control the costs of the ageing population, activating these employees will be one of the most important challenges. We can learn something from our German neighbours in this respect, as Germany has succeeded in raising the participation of elder employees with 15% in seven years (up to 52%). On top of that, German unemployment fell with 1.2 million between 2005 and 2007. The authors of this paper conclude that these excellent results stem from reforms that made the labour market more flexible – and not solely from the upswing of the economy in the recent years – and point to a number of good practices. A must read for Belgian policy makers in other words.

Immigrants do not squeeze natives out of labour market

Fri, 22 Aug 2008 12:00:00 +0100

As much as we used to think that squeezing out the older workers out of the labour market (lump of labour fallacy) would translate in to jobs for young people, believing immigrants on the labour market have the same effect on native employment is naïve. This is what follows from this NBER paper by Ottaviano and Peri who pone that immigrants and native jobs can be complementary which means the natives’ wages could go up thanks to immigration.

A common framework for blue collar and white collar workers implies new labour market policies

Wed, 20 Aug 2008 12:00:00 +0100

Marc De Vos calls for a common legal framework but stresses that it involves fundamental questions for better labour market performance. The impasse on the common framework hides a deficit of vision on labour market policy.

Social fraud in social security

Tue, 12 Aug 2008 12:00:00 +0100

Belgium is accumulating victories in its battle against social fraud. This is good for the state, and good for our social system.

Why do Europeans work part-time?

Tue, 12 Aug 2008 12:00:00 +0100

This paper of the ECB analyses the relative contribution of the business cycle and structural factors to the development of part-time employment in the EU. It comes out that, in the short-run, the business cycle affects negatively the development of part-time employment. In the long run, however, institutions and other structural factors are found to be the key drivers of the rate of part-time employment. In Belgium for instance, the relaxation of the legislation on part-time jobs had a positive effect on recent part-time employment development. Despite some drawbacks, part-time work may increase the labour choices open to individuals and may allow employers to adjust hours worked to cyclical conditions more easily. In the ageing context, it may also allow senior workers to opt for a smooth retirement and positively affect their employment rates.

Dismissal regulations dampen productivity

Mon, 04 Aug 2008 12:00:00 +0100

Financing the growing non active population assumes a rise in the productivity of the active population. This IZA paper shows that mandatory dismissal regulations can have a negative impact on productivity. The main reasons behind this result are the higher dismissal costs and reduced worker effort. Making it easier for the employer to hire temporary workers, on the other hand, enhances productivity. Hence, this paper provides grounds to re-evaluate the future of our dismissal regulation and suggests to think more along the lines of securing lifelong working than a particular lifelong job.

Employment risks and opportunities for an ageing workforce

Fri, 25 Jul 2008 12:00:00 +0100

This WZB article provides a detailed analysis of the employment situation of older workers (55-64 years) in the EU member states. Highlighting country differences, the authors draw the conclusions that this labour market challenge can be characterised to a large extent as a gender problem, that labour market policy for an ageing workforce must start much earlier than just with older people and that their employment situation can to a great extent be sought in the general economic parameters and especially in the degree of employment growth in the service sector. With a senior employment rate of 34,4%, Belgium is in the bottom league by European standards and needs to react quickly to strive towards the Stockholm targets of 50% by 2010.

The economic returns to a second language

Fri, 18 Jul 2008 12:00:00 +0100

Knowledge of an additional language may be associated with enhanced earnings because it may reflect what might generically be called ‘ability’ bias or because it may actually be useful at the workplace (and therefore demand of bilinguals is higher). Using Canadian data, this IZA publication found very substantial, statistically significant rewards to second official language use in Quebec, but not for the rest of Canada, which is Anglophone. This suggests that smaller language communities have larger incentives to learn other languages, well.

To “flexirationalise” the public sector

Fri, 18 Jul 2008 12:00:00 +0100

The age average in the public sector is generally higher than in the private one. So, according to this OECD report, to attract and to retain capacities in the public service could indeed represent a severe challenge in the years to come. To increase its attractiveness, the report favours the flexibility in employment rather than the increase of the public pensions that it considers as an expensive and insufficiently targeted approach. If Belgium still has progress to make in comparison with it’s neighbours, it should neither lose sight that the retirement of numerous civil servants also represents a tremendous opportunity to rationalize public employment.

The determinants of a high employment rate.

Thu, 10 Jul 2008 12:00:00 +0100

This paper compares labor market policies, institutions and outcomes for the EU member states, for the period 2000-2005. It focuses on indicators of generosity (expenditures relative to GDP) and relates these and other policy indicators to indicators of labor market outcome and performance. The results show that, on a cross-country basis, higher rates of employment are in general associated with higher expenditures on labor market policies, a lower degree of rigidity in labor market institutions and in product market regulation. With one of the lowest employment rate in the EU-15, Belgium should definitely act. It performs quite well regarding labor market policies, but there is considerable room for improvement regarding labour market flexibility and product market regulation.

Specific-training worse than general training for the senior employment rate

Fri, 04 Jul 2008 12:00:00 +0100

Many studies have shown that employees with firm-specific skills are more likely to be covered by employer-sponsored pension schemes than workers with general skills. Following this, this IZA paper tests the effect of trainings on retirement, and finds that workers who participated in firm-specific training in their early careers retire earlier than workers with a general training background. This indicates that shared investments in firm-specific training are embedded in implicit contracts that induce early retirement and suggests that training participation should be encouraged at a broader level than at the firm one.

Ethnic background matters on labour market

Fri, 27 Jun 2008 12:00:00 +0100

More evidence from the Netherlands shows that non-western immigrants never reach parity with native Dutch on the labour market, says this IZA working paper. Ethnic background thus seems to matter in explaining the underperformances of immigrants. Labour market integration therefore requires policies on various fronts such as unemployment, job quality and relation to education and upward mobility. Belgium is only just starting with unemployment….

How to combine labour intensification and population ageing?

Fri, 27 Jun 2008 12:00:00 +0100

In industrialised nations, there's an obvious trend towards labour intensification, by accumulation of diverse temporal constraints. At the same time, the population is ageing and the age structure of the working population is changing. This article of the “centre d’étude de l’emploi” underlines the challenge that the combination of these two tendencies represents. The authors approach the fact that the senior workers are less resistant to temporal pressure at work. They insist on the necessity of guaranteeing to seniors a suited working environment if one wants to promote longer professional careers.

More satisfied workers, but only in the North

Fri, 20 Jun 2008 12:00:00 +0100

This study led by ZebraZone brings to light that the global satisfaction of the Belgian workers increased last year. Among the explanatory factors, it notably cites a bigger confidence of the workers in the organisation, more autonomy, better interpersonal contacts and a reduction of the stress. It underlines however that the increase of satisfaction is only noticed in Flanders, where it is significantly higher than in the two other regions of the country. The authors invite companies to invest first and foremost in a better policy of change, in career’s opportunities and working conditions.

Red, orange and green lights for end-of-career policies

Mon, 16 Jun 2008 12:00:00 +0100

According to the 2001 Stockholm objectives, 50% of the 55- to 64-year olds should be working by 2010. To monitor in- and output incentives, a performance measurement system is required, a scorecard for example, pretty much as this WSE Steunpunt publication. The authors notice very little structural progress, and with a mere 31% of the 55- to 64-year olds working in Belgium, more drastic measures are becoming inevitable. A lot of work needs to be done.

Age and the labour market

Fri, 13 Jun 2008 12:00:00 +0100

Marc De Vos sketches the impact of ageing on the labour market and shows how the lamentable position of older workers on the Belgian labour market is untenable. He argues for a new paradigm and for a mobilisation that breaks open the Generation Pact for a “New Deal” on age and the labour market.

Reason over the purchasing power emotion

Fri, 13 Jun 2008 12:00:00 +0100

Marc De Vos nuances the cabal on purchasing power and argues for a pragmatic policy aimed at market functioning, sharp prizes, more employment and a focused compensation for inflation that also serves in the upcoming negotiations on the wage norm for 2009-10.

How to reconciliate inflation and purchasing power ?

Thu, 05 Jun 2008 12:00:00 +0100

Naïm Cordemans looks into the explanations of the gap between official and perceived inflation. He underlines that perceived inflation cannot be used as a reference for monetary policy or wage indexation. In the context of rising food prices, he discusses different ways to support the purchasing power of households.

Why the minimum wage policy is an ineffective tool in reducing poverty

Mon, 02 Jun 2008 12:00:00 +0100

The poverty rate, as measured by the number of people with net equivalence incomes below half the median income, has been increasing in recent years in Germany says this IZA publication. To prevent poverty among the working poor, introducing or increasing the minimum wage seems at first sight like a plausible cure. However, the authors found a weak link between low hourly wages and net household incomes, making the minimum wage policy a rather ineffective tool to combat poverty. This is due to the complex interactions between individual wages, the tax benefit system and net household incomes.

Can the social dialogue save the social policy?

Tue, 27 May 2008 12:00:00 +0100

Marc De Vos launches an appeal to the social partners to take up their responsibility, in the face of an impotent government, for a broad mobilisation on the Belgian labour market.

More technology for less unemployment

Fri, 23 May 2008 12:00:00 +0100

This European University Institute working paper challenges the conventional wisdom and states that technology deficit is more responsible for high unemployment than are labor institutions. The authors argue that the pace of technology adoption plays a fundamental role for how an economy’s labor market reacts to an acceleration in capital-embodied growth. This is good news for Belgium. It may suggest that in the fight against unemployment, creating conditions that prevent the emergence of a technology deficit should receive at least as much attention as labour market reform.

The unbearable lightness of Belgium’s strike laws

Tue, 20 May 2008 12:00:00 +0100

Marc De Vos deplores the impasse in the Belgian debate about strikes and argues that it leads to growing litigation. He pleads for a new societal consensus on the limits of an otherwise fundamental right to strike.

Student exchange helps to foster a European labour market

Fri, 16 May 2008 12:00:00 +0100

Increasing international labour mobility is essential in the Euro zone given the loss of most of the monetary and trade instruments. If that has been the aim of ERASMUS, then the program succeeded! This IZA publication computed that studying abroad increases one's probability of working in a foreign country by about 20 percentage points. Rational economic thinking is not necessarily what drives former ERASMUS students to work abroad though: the effects on the students' (language) skills matter, but also the interest in foreign cultures and... the desire to stay with the foreign partner.

Does wage fixation in Belgium increase unemployment rates in period of bad conjuncture?

Tue, 13 May 2008 12:00:00 +0100

When times are difficult, companies often maintain labour costs under control. This study of the national bank indicates that, more often than not, this takes place through a decrease in hirings and an increase in dismissals. Wage fixation by the collective work agreements and automatic indexations indeed leave little space for wage cuts. Wage rigidity influences negatively work possibilities for job seekers.

Belgium benefits from its neighbour's Labor Market Reforms, but insufficiently

Fri, 09 May 2008 12:00:00 +0100

This paper of the IMF reveals that German Labor market reforms have strong positive effects on the domestic economy, and positive spillover effect on the rest of the Euro area through trade and financial market linkages. In light of these results, the authors are of opinion that one can expect labor market reforms to have gradual expansionary effects on the national economy. Belgium benefits from labor market reforms implemented abroad, but it can definitely benefit more by implementing its own reforms.

Work Collective Agreements: To decentralise rather than to regionalise?

Fri, 09 May 2008 12:00:00 +0100

This study of the Dulbea brings to light that it is essentially the possibility to fix salaries at the company level and the subdivision of joint commissions (JC) in sub-JC or in regional joint sections which allow at present the adaptation of salaries to the regional difference in productivity. According to the authors, larger use of those two mechanisms could represent an appealing alternative to the regionalisation of wage negotiations: they would, on one hand, allow the avoidance of increasing administrative complexity in the joint commissions where a more important wage differentiation is not necessary. On the other hand, they would not only allow for taking into account productivity differences between regions, but also between provinces, labour pools and companies.

Years of service do not protect low-wage workers

Fri, 09 May 2008 12:00:00 +0100

Instead of raising retirement age, tying retirement benefit eligibility to years of services has often been offered as a solution to population ageing, since it would better protect lower-wage workers who start their careers relatively early and work more years prior to retirement than higher wage workers. However, according to this paper of the Urban Institute, men and woman with the least education (and thus often the lowest salary) also work the least, since early start is offset by higher disability rates and greater employment volatility. For the authors, years of service are consequently not likely to provide an effective way to protect the lowest-wage workers. This suggests the prominent need to increase the employability of low-educated workforce.

Creative with bottlenecks on the labour market

Wed, 30 Apr 2008 12:00:00 +0100

The Belgian activity ratio has to go up – no doubt about it. An important part of the solution is to solve the bottleneck vacancies. Based on different cases, first on micro level, then on macro level, innovative interventions are being suggested. The diversity of bottlenecks on the labour market – for the poorly educated, the technicians and the highly educated – demands as many strategies in order to solve this asap. In the light of the ageing problem, structural programs are being advanced too. Demand-oriented labour mediation, coordination and the right incentives are the key elements of the solution.

Does employment protection help immigrants?

Wed, 30 Apr 2008 12:00:00 +0100

Severe employment protection legislation (EPL) creates an information gap between native and immigrant workers. Because of sociological barriers – language, experience in the labour market, union membership etc. – the latter are less aware of their rights, and the duties of the employers. This information asymmetry creates a hiring asymmetry in favour of the immigrant worker: the fewer the worker is informed the lower the hiring cost, thus creating a comparative advantage that will benefit to the immigrant worker.

Vaccination against indexation fever

Tue, 15 Apr 2008 12:00:00 +0100

For Marc De Vos, 2008 is a pivotal year for the Belgian wage norm, rather than for the Belgian system of wage indexation. He pleads for remedies that combine the protection of both competitiveness and purchasing power.

Are all labour regulations equal?

Tue, 01 Apr 2008 12:00:00 +0100

Using India as its research pool, this study analyzes the effects of increases in employment protection and labour dispute regulation. Both are shown to substantially reduce employment and output. These laws do no seem to benefit workers either, as they do not increase the share of value added that goes to labour. Labour-intensive industries are the hardest hit by amendments that increase employment protection while capital-intensive industries are the most affected by laws that increase the cost of labour dispute resolution. These adverse effects are not alleviated by the widespread and increasing use of contract labour. A useful reminder to those who cast doubts on the trade-offs between employment and employment regulation.

Less coordination in wage bargaining may reduce regional unemployment differential

Tue, 01 Apr 2008 12:00:00 +0100

Empirical evidence in this paper of the IMF confirms that countries with more coordinated wage bargaining systems have lower regional wage differentials and higher regional unemployment differentials. Belgium is ranked second in the EU-15 with regard to the importance of regional unemployment disparities, and second regarding the level of coordination of wage bargaining. The results presented in this study suggest that less coordination in wage bargaining may significantly reduce the huge regional unemployment differentials faced by the country.

Unemployment insurance is also a labour market policy

Tue, 01 Apr 2008 12:00:00 +0100

Marc De Vos supports the systematic combination of unemployment benefits and activation measures. He underscores that activation is a social policy for the weaker participants of the labour market. While the combination of federal and regional competences appears inevitable, he warns that regional mobility should benefit rather than suffer from further devolution.

Young generation of Dutch women still prefer part time work notwithstanding increased labour market opportunities.

Tue, 01 Apr 2008 12:00:00 +0100

The Dutch model for combining labour and care is internationally unique with a high participation of women and a high share of part-time employment. The authors of this CPB study find that policies such as lower taxes for partners or better childcare arrangements did not lead to more hours worked. They conclude from this finding that the Dutch model of part-time employment is the result of (societal) preferences rather than of institutional barriers. The survey offers an alternative pitch about labour market differences between men and women.

Entrepreneurship as a public good

Mon, 31 Mar 2008 12:00:00 +0100

International comparisons learn that Belgium counts too few start-up companies. Apparently, potential entrepreneurs need to be activated just as the unemployed. Is there a genetic explanation for this passive attitude or is the average Belgian most and for all a rational free-rider preferring others to take up the efforts and risks of job creation?

Does immigration affect the Phillips curve? Some evidence from Spain

Tue, 18 Mar 2008 12:00:00 +0100

Immigration can help to moderate wages What is the impact of immigration on inflation? Spain experienced a drop in unemployment by 15 percentage points over the period 1995-2006, with roughly constant inflation. This paper estimates that the fall in unemployment since 1995 would have led to an annual increase in inflation of 2.5 percentage points if it had not been largely offset by immigration, a finding that suggests that immigration can help to suppress inflation as unemployment falls and labour market shortages appear. The Spanish example suggests that also the Belgian economy, with rising inflation and a labour market with increasing shortages, could benefit from more immigration.

Can unemployment insurance stimulate economic transition?

Mon, 10 Mar 2008 12:00:00 +0100

Unemployment insurance can have pernicious effects on employment since it finances inactivity. However, it can also facilitate economic transition by diminishing its cost for the workers. This study presents some empirical findings illustrating the latter. What remains is the need to design unemployment insurance designed in such way that activity is encouraged as much as possible.

Guaranteed survival income trap threatens about 7,000 people in Ghent

Thu, 21 Feb 2008 12:00:00 +0100

Families which must manage with an unemployment benefit, a guard compensation or a another replacement income, are frequently worse off than people who live from a guaranteed minimum income. According to a study of ACW-Ghent this is the case for about 7,000 people in Ghent. By means of examples it becomes clear how big the differences in monthly income can be. Many people just above the treshold to qualify for additional support whose people with a guaranteed minimum income get are actually worse off than these latter. The ACW-Ghent proposes to also give the former entitlements to additional support. The authors do not investigate whether or not this policy would increase the guaranteed survival income trap.

The UK is no longer mid-Atlantic

Wed, 13 Feb 2008 12:00:00 +0100

In 1997 the UK had a tax burden some 7.6% lower than that of the eurozone, the strongest pension system in Europe, and a far less complex and distortionary tax and benefits system than it has today. There is still a popular misconception that the country still enjoys these advantages, that Britain is still the mid-Atlantic economy with tax and spending burdens part-way between the US and Continental Europe. This is however no longer the case: the UK is instead tending towards being a fully fledged member of the continental European club, with a share of government outlays in its GDP that by now exceeds the German figure. This paper examines areas where Germany’s arrangements appear superior to Britain’s. It suggests that Belgium should rather look for inspiration in Germany than in the UK.

Pension Reform, retirement and life-cycle unemployment

Mon, 11 Feb 2008 12:00:00 +0100

It is now widely accepted that in the absence of reform, pension spending will grow to unprecedented levels. This paper investigates the measures that preserve labor market incentives and studies the potential economic impacts of the measures recently implemented in Austria. In the long-run, these latter will produce a significant GDP gain, they might postpone the average age of retirement by almost one year, boost labor market participation of older workers and offer significant aggregate welfare gains. There is inspiration to be taken for Belgium…

Early retirement does not create jobs for younger workers

Fri, 08 Feb 2008 12:00:00 +0100

The assumption that early retirement provides additional job opportunities for younger workers has been at the core of the Belgian labour market policy for decades. In this IMF paper, four economists of the University of Liège give the death blow to this “lump-of-labour” idea. On the macro level of the labour market they indicate a negligible link between elderly retirement and activity among the young and prime-age populations. The nature of youth unemployment in Belgium is rather the result of structural weaknesses in the areas of education, unemployment compensation and wage formation. A limitation of their research is the lack of attention for large regional differences and their causes.

Gender gaps in the European labour market

Thu, 07 Feb 2008 12:00:00 +0100

Women are continuing to drive employment growth in Europe, but remain disadvantaged on the labour market in relation to men, says a report adopted by the European Commission. More than half of the new jobs created in the EU since 2000 have been taken by women, yet several aspects of the quality of women’s work remain problematic. The report does not examine the causes of gender segregation (discrimination or different choices?), which is unfortunate as equality is not about outcomes but about opportunities.

Immigrant workers and temporary work: a front united?

Thu, 07 Feb 2008 12:00:00 +0100

Marc De Vos reflects on the recent improvement of the jobless rate for young immigrants in Flanders and connects it to the proposal to restrict the duration of temporary work. He defends temporary work limitations but warns that less temporary work also means less work opportunities for the weakest groups as long as the regular labour market stays rigid.

Flexibility: also in a strongly regulated labour market?

Fri, 01 Feb 2008 12:00:00 +0100

In order to promote prosperity and employment, labour markets must adapt to the dynamics of the economy. This study shows that strongly regulated labour markets such as the Belgian labour market can acquire the necessary flexibility by allowing it at the margin in atypical forms of employment. However, the aggregate result will obviously differ from countries with fully dynamic labour markets. Flexibility at the margin leads to a dual labour market, diminishes productivity, slows down career development and marginalises the weak of the society.

The Future of the Belgian Welfare State: Pensions and Health Care

Thu, 31 Jan 2008 12:00:00 +0100

The Belgian social security system is more and more submitted to budgetary constraints. At a conference on the future of the welfare state, Marc De Vos offers reflections and perspectives on the past, present, and evolution of pensions and healthcare in Belgium. Change to improve is for him the motto of the future.

France modernises labour market

Wed, 16 Jan 2008 12:00:00 +0100

With the publication of an agreement on the modernisation of the labour market in mid-January 2008, France is on the reform path. Already approved by three labour unions as well as by the employers’ association, the agreement includes an easing of the probation period, a more flexible employment protection legislation and the creation of a new and flexible employment contract for executives. The French example can inspire Belgium also to opt for reform.

Combining working and living: a necessary challenge

Thu, 10 Jan 2008 12:00:00 +0100

The European Union needs to increase employment rates to ensure continued economic growth and promote social inclusion. To do so, however, it needs to make it easier for people to reconcile work and family life to facilitate labour market entry. This Eurofound paper addresses this dilemma. The authors find that resolving conflicting demands of paid employment and domestic responsibilities is especially difficult for disadvantaged groups such as lone parents and women. They argue that working time flexibility is key to facilitate employees’ work-life balance. As the European population ages, also childcare and elderly care have an important contribution to make.

Globalisation has only limited impact on wages in advanced economies

Thu, 10 Jan 2008 12:00:00 +0100

The declining share of income accruing to labour in advanced economies is often portrayed as an unwelcome side effect from international competition through globalisation. This IMF Working Paper however explains that globalisation is only one of several factors that have affected the declining labour income share. Rapid technological change has had a bigger impact, especially on the wages of unskilled workers. To maximize the benefits from labour globalisation and technological change while also addressing the distributional impact, policies should seek to improve the functioning of labour markets, strengthen access to education and training and ensure adequate social safety nets that cushion the impact on those adversely affected.

Ageing is not a fatality

Wed, 09 Jan 2008 12:00:00 +0100

In our country ageing is seen as a threat for our pensions and health system. According to the Institut Montaigne ageing is not a fatality. Another approach more offensive is possible. As far as this is concerned, Japan might be a good example. Following the Japanese example, Montaigne gives 8 concrete propositions in order to transform ageing into a potential source of growth. Among others, Montaigne proposes to develop a more dynamic labour market for young seniors by abolishing the age limit and all the early retirement mechanisms. According to the authors the healthcare system must also change. A possible solution is to act in favor of cheaper solutions such as home care. Transforming ageing into an opportunity is necessary in order to face tomorrow’s challenges.

Unemployed despite increasing shortage

Wed, 12 Dec 2007 12:00:00 +0100

Slowly but surely, the combination of ungreening and ageing transforms the labour market. What does increasing shortage on the labour market imply for the evolution of unemployment? Without ambitious reforms unemployment in the future is rather threatened. As long as labour does not pay off, the low-skilled remain outsiders. But also the high-skilled can suffer.

Women and young people: outside the labour force

Wed, 12 Dec 2007 12:00:00 +0100

What are the main determinants of inactivity in Europe? This Eurostat publication analyses the inactive population in the European Union. The study concludes that inactivity in the labour market is very gender and age specific. The main reason for young people not being in the labour market is their enrolment in formal education, while retirement is the main reason for inactivity of older persons. Increasing our activity rate is crucial in order to cope with ageing. In Belgium more than 60% of the young persons (15-24) are inactive. This is above the UE-27 average. Policy makers should take this into account.

More and better use of ICT for a more prosperous Europe

Tue, 04 Dec 2007 12:00:00 +0100

For most of the post-war period, productivity was growing faster in Europe than in the United States. Yet, after 1995, the trends reversed. Robert Atkinson from the Information Technology & Innovation Foundation (ITIF) observes that the ICT revolution was responsible for the lion’s share of U.S. productivity growth and discusses why a productivity turnaround is critical for the future of Europe. Policy recommendations include the use of tax incentives and tariff reductions to spur ICT investment as well as the active encouragement of universal digital literacy and digital technology adoption. In terms of benefits from ICT investments Belgium belongs to the top students of the EU. Nevertheless there is still significant scope for productivity improvements in our country, as also confirmed by a study of the Federal Planning Bureau that can be found elsewhere on our website.

Innovation and adaptation: how companies and countries stay wealthy

Tue, 27 Nov 2007 12:00:00 +0100

The challenge for Belgium and other wealthy countries is to stay wealthy in a rapidly evolving global economy. Companies and countries face an ever more volatile market place. As the “sweet spots” for corporate success are constantly changing, successful entrepreneurs have a social capacity for flexibility and adaptation. To policymakers, successful adjustment has often been posed as a choice between social protection and market flexibility. This study of the Berkeley Roundtable on the International Economy (BRIE) recasts this all too common framing and emphasises instead that a strong social protection system could be leveraged to a unique advantage in the emerging digital era.

The keys for labour market success in Europe

Tue, 20 Nov 2007 12:00:00 +0100

The combination of active labour market policy and less rigidity in labour and product markets are the explanatory factors of a successful labour market policy in Europe. This is the lesson of the first EU-wide cross-country study on labour market performance in the EU.

Also Denmark grapples with the efficiency of activation

Fri, 09 Nov 2007 12:00:00 +0100

Experiment Denmark proves that active labour market policy works. The achievement of low and stable unemployment in the country is often attributed to the so-called “flexicurity” model. But effectiveness does not equal efficiency: activation demands scarce resources. Policymakers pleading for more activation should not only look at results but also at the resources required for results. So far, the focus in Belgium is insufficiently on the (in)efficiency of certain types of activation.

More diversification for migration policies

Mon, 29 Oct 2007 12:00:00 +0100

With a labour market more and more global and more and more qualified, the French migration policy does not promote enough the work migration and favors to much the ‘family’ migration. This is the result of this OECD study which recommends to France to diversify its migration policy introducing a dose of selected, temporary and qualified migration. Belgium should pay attention as it shares common migration characteristics with France, such as a dominance of lowly qualified migration and workforce shortage in key sectors.

The need for a targeted labour migration policy in a welfare state

Mon, 29 Oct 2007 12:00:00 +0100

Just like Belgium, the Netherlands are attractive for low-skill migrants but less attractive for highly-qualified migrants. This study of the Dutch Centraal Planbureau (CPB) explains this observation by pointing to the welfare state with a relatively high degree of income distribution. Extensive welfare steeds need to put an extra effort to be attractive (financially or otherwise) for highly-qualified migrants. Possible efforts include more fiscal advantages during the first years of stay or simplified procedures for this group of migrants. It furthermore seems wise to only carefully admit low-skill migrants on a temporary basis.

Belgium is missing the Lisbon train.

Thu, 25 Oct 2007 12:00:00 +0100

The Federal Planning bureau is ringing the emergency bell. If Belgium does not undertake additional efforts, we will miss all the Lisbon strategy objectives from 2010. Improvement of public finances, diminution of the fiscal and social contribution pressure on labor, increases in the activity rate and shrinkage of greenhouse gas emissions require new reforms. These reforms are also necessary to improve the functioning of the labor market. The Planning Bureau notices that the diminution of the social contribution improves employment but only partially compensates for the fiscal loss of the government.

The war for talent is open.

Wed, 17 Oct 2007 12:00:00 +0100

Belgians live longer and have fewer children, this is a fact. In order to compensate for the foretell shortage of qualified workforce we will have to compete with other OECD countries for qualified and employable migrants. According to this publication of the Hamburg Institute of International Economics, we should compare our migration policies with those of countries with a tradition of economic immigration such as the United States, Canada or Australia.

Age discrimination deeply rooted on the labour market.

Tue, 25 Sep 2007 12:00:00 +0100

Legislation prohibits age discrimination on the labour market. However, the (often implicit) use of age could well be the most widely spread of all prejudices on the labour market. This is the lesson of a study for the United Kingdom. A curious detail: depending upon the function, a higher age can either favour or damage a candidate's chances.

Regionalisation of wages without regional wage setting?

Mon, 24 Sep 2007 12:00:00 +0100

Should collective wage bargaining be regionalised to better reflect different economic developments in the Belgian regions? In other words: are the Walloon wages too high for the Walloon economy and labour market, impeding Wallonia to catch up? And are Flemish wages suppressed to too low a level for the Flemish productivity and labour market? Research of the ULB focuses on existing wage differentials between regions, sectors and joint committees, which are partly the result differing profits at company level. In their conclusion, the authors tread on thin ice when they deduce from existing wage differentials that regionalisation of wage setting would only slightly affect wage levels in the regions.

Successful activation is more than the carrot

Mon, 24 Sep 2007 12:00:00 +0100

To stimulate the exit rate from unemployment one can use the carrot or the stick. This IZA study looks at the effects of sanctions of unemployment insurance benefits for a sample of Danish unemployed. For both males and females the exit rate increases by more than 50% following imposition of a sanction. The harder the sanction, the larger it’s effects. The analysis furthermore suggests that sanctions wear out after around 3 months, that particular groups of unemployed are more responsive to sanctions than others, and that men react ex ante to the risk of being sanctioned in the sense that men who face a higher risk of sanction leave unemployment faster.

Old is less out?

Thu, 30 Aug 2007 12:00:00 +0100

The employment rate of workers over 50 on the Belgian labour market has increased with 8,4% in one year, according to the most recent figures of the Department of Economy. Almost 48% of those over 50 are currently employed, as compared to 39% in 1999. An important part of this evolution is linked to economic growth and the gradual ageing of the workforce in a tighter labour market. There is little evidence that non-active seniors over 50 are reintegrating the labour market. In any event Belgium remains far behind the European target of 70% overall employment rate.

Activation is more than monitoring

Tue, 28 Aug 2007 12:00:00 +0100

A study of the Belgian activation policy shows the importance of personal counselling for the activation of the unemployed. The threat of monitoring the job search behaviour of the unemployed has only a limited positive effect on employability, moreover at the expense of accepting lower quality jobs. Personal counselling is more effective and does a better job in steering the unemployed towards a suitable employment. Not monitoring but counselling should therefore be the credo of Belgium’s activation policy.

Given Regional Disparities, Should we Promote Mobility or Regionalise Wages?

Thu, 16 Aug 2007 12:00:00 +0100

Given regional disparities in the European Union and in Belgium in particular, policymakers must choose either for more mobility on the labour market or for more wage flexibility. Promoting mobility in Belgium implies a significant reduction of real estate taxes, just as in the United Kingdom.

More proof of the dual labour market in the European Union

Tue, 14 Aug 2007 12:00:00 +0100

Temporary term work of fixed duration is overrepresented among the young and the low skilled, who often have no other option than a fixed-term employment contract.

Early retirement: a question of supply and of demand

Mon, 30 Jul 2007 12:00:00 +0100

More evidence of collusion in early retirement. Early retirement decisions are not only the result of rational choices by the retiring workers (supply side). In many cases, firms organize early retirement as a cost effective way to address change (demand side). The pension system then acts as a kind of unemployment insurance which reduces the dismissal costs for the firms. While both parties are served, society pays and the labour market looses often valuable human capital.

How profit sharing enhances training investments at firm level

Mon, 30 Jul 2007 12:00:00 +0100

The link between profit sharing and training is seldom made. This paper shows how profit sharing can indirectly boost employee training in two ways. First, profit sharing provides an effort incentive to the worker, thereby increasing the returns to training. Second, profit sharing makes labor costs partly adjustable to economic circumstances, with a positive impact on the expected tenure of the employee. Both effects make investment in training more attractive for the firm. A useful reminder for Belgium, where profit sharing remains marginal and training investments remain below par.

Inclusion on a labour market in permanent transition

Mon, 23 Jul 2007 12:00:00 +0100

The modern transitional and dynamic labour market requires a policy that enables change for the employers while guaranteeing its success for workers and job seekers. Without change work becomes a dead-end street. On the other hand, change by itself is no guarantee for inclusion. The Netherlands are often seen as an example for transition without exclusion. However, the position of immigrants on the Dutch labour market is less successful, but not uniformly negative either.

Ageing but healthy

Tue, 17 Jul 2007 12:00:00 +0100

Ageing hangs as the Sword of Damocles over the current governmental negotiations. Marc De Vos explains that the impact of ageing is also caused by the ageing of the working-age population, which is not beneficial to future innovation and productivity. On the other hand, the ageing workforce is ever healthier and better trained. We need to grasp that opportunity to capitalize on the benefits of ageing.

Dismissal is More than a Redundancy Payment

Tue, 03 Jul 2007 12:00:00 +0100

The social plan accompanying restructuring at Opel Antwerp is the subject of controversy. To some it is a cynical and immoral example of profiteering at the expense of the taxpayer. To others it as a freely negotiated contract that reflects the extent of the drama. Marc De Vos claims that is more important to notice that, in spite of the generation pact, the basis redundancy philosophy is one of loads of money and spontaneous early retirement. We need to develop a different approach where dismissal becomes the jump board to new employment.

Unemployment Insurance in Welfare States: Soft Constraints and Mild Sanctions

Fri, 29 Jun 2007 12:00:00 +0100

Activity-oriented unemployment insurance regimes with a high likelihood of required participation in active labour market programmes, high sanction probabilities and duration limitations on unconditional unemployment insurance entitlements deliver shorter unemployment spells than pure income insurance regimes. But which types of activation yield the highest return? A recent study of the Institute for the Study of Labor suggests that a rapid start of activation measures is more important than their harshness. Limited activation measures can be very effective if they are quickly implemented at the beginning of the unemployment spell.

From Job Security to Employment Security on the Belgian labour Market

Tue, 26 Jun 2007 12:00:00 +0100

From Job Security to Employment Security on the Belgian labour Market. Ideas for a New Deal for Labour in Belgium

Tue, 26 Jun 2007 12:00:00 +0100

Where is our labour market going in the 21st century? How do we handle ageing and globalisation successfully? Can we finally push back mass unemployment? Can we combine more flexibility with more security? Can we make older people work more? Can we finally include foreigners in the labour force? This book provides new ideas to adjust the organisation of the Belgian labour market to a new era. It calls for broad and deep reforms for the long term, beyond the convulsive short-term reflex of acquired rights.

Welfare isn't Working. The New Deal for Young People

Mon, 18 Jun 2007 12:00:00 +0100

Can Blair’s Third Way inspire Belgium how not to fight youth unemployment? The British think tank Reform assesses the achievements of the Labour party in the fight against youth unemployment since 1997 and deals another blow to the record of employment programmes.

Fraude Sociale et Travail au Noir en Belgique: Situation anno 2006

Fri, 15 Jun 2007 12:00:00 +0100

Fiscal and social fraud is bad thing for the economy, the workers and the state coffers alike. How important is fiscal and social fraud in Belgium? The Hoger Instituut voor Arbeid and the KUL make an estimate for 2006.

Labor's Liquidity Service and Firing Costs (WP/07/120)

Tue, 15 May 2007 12:00:00 +0100

Are dismissals a useful tool to ensure the future development of companies that are temporarily short of cash? In other words: does dismissal restriction reduce future employment opportunities? An IMF Working Paper analyses the interaction between employment protection regulation and liquidity needs.

What did All the Money do? On the General Ineffectiveness of Recent West German Labour Market Programmes (IZA DP no. 2800)

Tue, 15 May 2007 12:00:00 +0100

The Belgian labour market is densely populated with employment programmes. Do they really work? In West-Germany similar programmes are found not to improve employment opportunities for their participants.

Lessons from Successful Labor Market Reformers in Europe

Sat, 05 May 2007 12:00:00 +0100

The new Belgian government can learn from successful experiences in labour market reform in other countries. These experiences show that success requires an internally consistent package of reforms…

Regionalisation of Labour Market Policy Is No Panacea

Wed, 28 Mar 2007 12:00:00 +0100

In the run-up to the federal elections the debate on the regionalization of labour market policies is raging. Marc De Vos stresses that regionalization is no miracle solution. What matters is substantive reform of labour market policies. For that purpose regionalization serves more as a means than as an end.

Restructuring: a Necessary Evil

Wed, 28 Feb 2007 12:00:00 +0100

Marc De Vos reflects on the referendum at Volkswagen Forest and concludes that the employees have chosen for the future. Restructurings are genuine dramas but are sometimes necessary to prepare the company or the economy for new opportunities.

The politics of Labour Market Reform: How Belgium Can Learn From Successful European Precedents

Wed, 21 Feb 2007 12:00:00 +0100

Robert Cox lays focuses on Belgium in his speech on labour market reform at the first Itinera Institute Discussion.

The Ideas and Politics of Labour Market Reform

Mon, 19 Feb 2007 12:00:00 +0100

Robert Cox explains why some European countries fail in labour market reforms where others succeed.

Global Warming and Social Heating

Thu, 15 Feb 2007 12:00:00 +0100

Jean Hindriks perceives a new class struggle between the highly qualified, for whom globalisation offers new opportunities, and the more vulnerable and less qualified.

Atlas Shrugged

Wed, 14 Feb 2007 12:00:00 +0100

Marc De Vos reflects on the importance of entrepreneurship and concludes that the legitimate war on corporate fraud should not degenerate in a witch hunt.

From Regional Labour Market To Regional Labour Market Policy

Sat, 03 Feb 2007 12:00:00 +0100

Marc De Vos reflects on the nature and causes of regional labour market disparities in Belgium in a conference speech.

Good Advice From the Supreme Council

Fri, 22 Dec 2006 12:00:00 +0100

The yearly report of the Supreme Council for Employment contains remarkable data on the dysfunctions of Belgium’s labour market. Marc De Vos explains that the Belgian labour market is still chronically ill. Labour market reform is therefore an essential theme for the upcoming federal elections.

Is Denmark the European Employment Champion?

Thu, 07 Dec 2006 12:00:00 +0100

With an official unemployment rate of 4.2%, Denmark apparently performs better than European growth champion Ireland. The low Danish unemployment figure is an essential part of the hyped 'Scandinavian Model'. Johan Albrecht explains that the real unemployment or inactivity in Denmark increases to 15% when one includes the number of participants in labour market programmes as well as people in early retirement schemes.

Fostering Mobility Through Competence Development

Wed, 15 Nov 2006 12:00:00 +0100

Labour market adaptability is essential for success in an ever changing economic environment. The European Foundation for the Improvement of living and working conditions and the European Center for the development of vocational training offer recommendations.

Higher Minimum Wages or More Purchasing Power?

Fri, 29 Sep 2006 12:00:00 +0100

The Belgian debate about higher minimum wages is very similar to the current American debate. Marc De Vos explains how American economists warn that an increased minimum wage may effect employment in the weakest segments of the labour market. A net increase of wages may therefore constitute a meaningful alternative.

Unemployment: a Shame

Mon, 11 Sep 2006 12:00:00 +0100

After the Union of Independent Entrepreneurs (Unizo) and the Flemish liberal party (VLD), the Flemish socialist party (sp.a) has joined the debate on unemployment insurance reform with a proposal for an intense activation policy. However the question arises whether scarce resources should not be better used for a targeted reduction in labour taxes.

From Welfare to Workfare: Also for Belgium?

Wed, 30 Aug 2006 12:00:00 +0100

A political debate is gathering whether Belgium’s unemployment insurance should limit the duration of its benefits and require the unemployed to work in return for their benefits. Marc De Vos explains that President Clinton’s decade old welfare reform introduced similar measures in the United States. Limiting the duration of benefits and requiring the beneficiaries to perform services in return has had a genuine activating effect in the US, but also because of their combination with other reforms.

Welfare isn't working - the New Deal for Young People

Wed, 30 Aug 2006 12:00:00 +0100

Germany and France are continental European welfare states with severe labour market problems. Low employment and high unemployment result from labour market institutions that inhibit labour market adaptability. This paper highlights recent labour market reforms in core areas such as active and passive labour market policies, employment protection and the funding of social policies through taxes and social contributions. To what extent can more favourable conditions for employment growth be created? The authors identify the limits of partial reforms as to the creation of more efficient labour market institutions although such reforms are highly plausible in politico-economic terms. The cumulative effect of marginal changes however leads to a gradual medium-term transformation of continental European labour markets.

Read the full report at: http://ftp.iza.org/dp2675.pdf

Selective Flexibility And Dual Labour Market In Times Of Creative Destruction

Fri, 30 Jun 2006 12:00:00 +0100

The fight against unemployment is a priority for almost any government. However, the unemployment rate in Western Europe often remains unacceptably high, notwithstanding initial labour market reforms. Johan Albrecht analyses why selective labour market reform does not yield the desired outcome.

Scandinavia à la Carte

Fri, 16 Jun 2006 12:00:00 +0100

The president of the Flemish liberal party, Bart Somers, proposes to raise unemployment insurance payments while limiting their duration. The Flemish socialist party of Johan Vande Lanotte on the other hand wants to fight for employment by accompanying the unemployed, not by limiting their unemployment insurance. While their respective policy proposals differ, both parties invoke the so-called “Scandinavian model” to justify their position. Marc De Vos explains that this “Scandinavian model” in fact hides several models and that Belgium urgently requires a general strategy for employment.

Competitiveness: the Ultimate Economic Theme for 2006?

Tue, 09 May 2006 12:00:00 +0100

The competitiveness of the Belgian economy seems to be endangered. To safeguard our international competitiveness, the social partners want to elaborate control mechanisms securing that the evolution of the Belgian wage cost resembles the trends in our neighbouring countries. Johan Albrecht argues that wage cost policy will probably not impact the Belgian unemployment rate because our fiscal system continues to price labour out of the market, and this observation also holds for labour that is not exposed to international competition. Our future welfare level will be determined by the successful integration in our economy of economically non-active groups and of the evolution of labour productivity. Therefore we need fundamental reforms. The focus on industrial wages in our neighbouring countries risks crowding out concerns for essential reforms.

French Lesson

Fri, 31 Mar 2006 12:00:00 +0100

Marc De Vos reflects on the French government’s surrender to the streets protests against the CPE.