Regionalization of Wage Setting in Belgium: Real Necessity or False Debate?

Plasman, Robert

Regionalization of Wage Setting in Belgium: Real Necessity or False Debate? - 2007.


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In Belgium, questions over the wage-setting system interact with the regionalization debate. Among the suggested reforms, the regionalization of the collective bargaining system comes up frequently. It relies on the assumption that productivity differences between the regions are not fully taken into account in a unified wage setting system. Our findings challenge this hypothesis by putting forward the current existence of wage differentials between regions, industries, and joint committees. We also show that wages depend upon profits in all regions. We conclude that profitability variations are already integrated into the wage formation process. Hence, we cannot be certain that a regionalization of the wage-setting system will lead to a different outcome.

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