Matthew Runs Amok: The Belgian Service Voucher Scheme

Abstract

The Belgian service voucher scheme, in its current form, has been in place since January 2004. Consumers use the service vouchers to pay for a limited but potentially high-volume range of domestic services — including cleaning, washing and ironing — that are deemed to have been priced out of the regular market due to the high cost of labour. The principal objective of the scheme is to raise employment levels among the less skilled and to reduce informal economy activity. Another objective is to help workers achieve a better work-life balance, potentially also increasing their effective labour supply and productivity. Within the European context, it is probably the most heavily subsidized scheme of its kind — more than 70% of the cost of the services rendered to consumers is borne by the state. As a consequence, the scheme has proved tremendously popular, probably making it the biggest scheme of its kind in relative terms. The growth in the number of users and people employed through the scheme has been nothing short of explosive, albeit with some levelling off over recent years. It is routinely hailed as the most successful employment scheme ever devised in Belgium, a country that has not seen a shortage of ambitious employment schemes and spending to match.