Combating In-Work Poverty in Continental Europe: An Investigation Using the Belgian Case

Recent studies find in-work poverty to be a pan-European phenomenon. Yet in-work poverty has come to the fore as a policy issue only recently in most continental European countries. Policies implemented in the United States and the United Kingdom, most notably in-work benefit schemes, are much discussed. This article argues that if it comes to preventing and alleviating poverty among workers, both the policy options and constraints facing Continental European policymakers are fundamentally different from those facing Anglo-Saxon policymakers. Consequently, policies that work in one setting cannot be simply emulated elsewhere. We present micro-simulation derived results for Belgium to illustrate some of these points. Policy options discussed and simulated include: higher minimum wages, reductions in employee social security contributions, tax relief for low-paid workers, and the implementation of a stylised version of the British Working Tax Credit. The latter measure has the strongest impact on in-work poverty but in settings where wages are compressed, as in Belgium, a severe trade-off between coverage and budgetary cost presents itself. The article concludes that looking beyond targeted measures to universal benefits and support for employment of carers may be important components of an overall policy package to tackle in-work poverty.negative income taxes, in-work poverty, low pay, in-work benefits

A care time benefit as a timely alternative for the non-working spouse compensation in the Belgian tax system

Over the past decades, the growing labour force participation of mothers has rendered the Belgian personal income tax system increasingly outdated. Especially the ‘marital quotient’ system - that allows spouses with monetary income to transfer part of their tax base to a spouse without monetary income - is no longer a tax allowance that compensates childcare efforts. It rather has become a subsidy to older cohorts for their past childcare efforts. As an alternative, we model in this article a system that is geared towards the effective care trajectories of nowadays parents. We thereby follow earlier ideas of Hilde Bojer, Patricia Apps and Ray Rees to reflect care efforts in the tax base of individuals. Following Bojer, we propose a system that incorporates a socially grounded amount of childcare time in household income, and simulate this with the Belgian microsimulation model MISIM. The amount relates to the number and age of children and can either be procured through childcare services or self-provision. In the proposed system both market- and self-provided care result in a similar ubsidy. We elaborate a monetary estimate of self-provided childcare on the basis of the detailed information of time use in the Flemish Family and Care Survey (2004-2005). For discussion we provide an overview of potential drawbacks and advantages and evaluate the redistributive impact of the simulated alternative.ground, childcare, tax system, static simulation

Water expenses by households living in Flanders: Data availability in the Belgian EU-SILC

Few data sources in developed countries contain for a representative sample of households information on water expenses alongside a rich set of reliable information on individual and household characteristics. In this Data in Brief we describe the Belgian EU-SILC data, which we used for ‘Measuring water affordability in developing economies. The added value of a needs-based approach’ (Vanhille et al., 2018) [1]. EU-SILC can be obtained from the Belgian National Statistical Institute and is the most important representative household survey on income and living conditions in the European Union, and contains, among others, an advanced measurement of household income. It is not well-known, though, that national datasets often contain more information, making them suitable for studies that are somewhat outside the ‘core scope’ of EU-SILC. One example is studying the consumption of water by households, as can be done for Belgium. In this article we briefly introduce the Belgian EU-SILC and present the data on water expenses for households living in Flanders. In 2015, 50 per cent less than 23 EUR on water, while 90 per cent spent less than 45 EUR on water. Keywords: Survey data, Water expenses, European Union, Income, EU-SIL