IZA DP No. 8717: Matthew Runs Amok: The Belgian Service Voucher Scheme
published in: Carbonnier, C. and N. Morel (eds.), The political economy of household services in Europe, Palgrave MacMillan, 2015
In response to structurally poor job prospects for the least skilled, a number of European countries have introduced measures to boost domestic services employment. No country has done so with more fervor than Belgium. Belgian consumers can use the so-called "Service Vouchers" to pay for a limited but high volume range of domestic services like cleaning, washing and ironing. It is probably the most heavily subsidized scheme of its kind in Europe – more than 70 per cent of the cost of services rendered to individual consumers is borne by the state. Not surprisingly, the scheme has proved tremendously popular. This contribution argues that the scheme is facing a number of particular problems and challenges. While initially many of the people employed under the scheme had experienced past unemployment spells, new recruitment has increasingly drawn on the ranks of those already in work. Furthermore, entrapment in service voucher jobs is rife, going against the purported objective of the scheme in offering a stepping stone to the regular market. Another worrying aspect is that there is some evidence of partial displacement of regular skilled workers. The principal winners are the generally highly educated, relatively well-earning service voucher users who can now outsource domestic chores at a bargain price in the regular market, gaining leisure and care time as well as getting in return more trustworthy, reliable and better quality services than would otherwise be obtainable.