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OECD Economic Surveys: Belgium 2017

image of OECD Economic Surveys: Belgium 2017

Belgium performs well in many economic and social dimensions. However, in spite of several important reforms in recent years productivity growth has weakened markedly since the financial crisis. Reinvigorating productivity growth is vital to sustaining increases in living standards and supporting inclusive growth. Keys to improving productivity include increasing market entry and exit in the business sector, reducing skills mismatches, enhancing mobility in the labour market, improving public infrastructure and fostering innovation.

While overall education levels are high, some suffer from poor skills, especially those with a low socio-economic or immigrant background. The labour market performance of immigrants, especially women, and low-skilled and older workers is comparatively weak. Improving the capacity of the educational system to provide disadvantaged students with necessary skills would enhance inclusiveness. Further reducing social security contributions on low wages would facilitate the entry of low-skilled workers into the labour market, while the participation of older people could be boosted by more on-the-job training and increased use of flexitime.

Enhancing productivity and inclusiveness will depend on enhancing social and physical infrastructure investment. Transport infrastructure investment to relieve bottlenecks around big agglomerations would promote both productivity and environmental goals. Given high public debt, these investments could be financed through reductions in inefficient public spending, user fees or by tapping private sources of finance.

SPECIAL FEATURES: IMPROVING THE BUSINESS ENVIRONMENT; SKILLS AND PRODUCTIVITY GROWTH

 

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Raising and mobilising skills to boost productivity and inclusiveness

A highly educated and skilled workforce has been an important driver of productivity performance and prosperity in Belgium. This chapter examines the skills policies that could help improve productivity and inclusiveness. Productivity growth would benefit from an increased focus on lifelong learning, and improved and more flexible working conditions for older workers. Establishing institutions to foster more efficient allocation of students and skills would also help underpin productivity growth. Improving inclusiveness requires increasing access and participation in tertiary education, especially for students with a disadvantaged background. Digitalisation opens great opportunities for labour productivity growth but is disrupting the nature of employment relationships. It calls for measures that encourage information and communication technology (ICT) upskilling and adapting tax and benefit systems to the rise of on‐demand jobs linked to the use of e-platforms.

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