The Service Voucher

The Peer Review was held on 26th and 27th October 2006 in Brussels, Belgium, hosted by the Federal Public Service, Employment, Labour and Social Dialogue. In addition to the host country, 12 peer countries participated in the discussions as follows: Austria, Bulgaria, Czech Republic, Finland, France, Hungary, Iceland, Latvia, Malta, Portugal, Romania, and Sweden.

The Service Voucher

The service voucher scheme is a consumer subsidy introduced in 2003 in order to encourage the demand for domestic services and proximity services, to create jobs in this sector (of benefit to long-term unemployed and other excluded groups), to provide incentives to convert undeclared work into regular employment, and to enable some high-skilled workers (especially women) to (re-)enter the labour market. The service voucher builds on, and aims in time to replace, a previous system of Local Employment Agencies. Each voucher costs the user • 6.70, which purchases one hour‚s domestic help from a registered company (the cost of the voucher is partially tax-deductible). In addition to the • 6.70, the registered company receives a government subsidy of • 14.30. The target of the scheme was to create 25,000 extra jobs by 2007 (an objective already exceeded).

Evaluation of the programme has been ongoing. It has shown that its relatively high gross cost is partly be offset by the savings in social payments (including unemployment benefit). However, much of the benefit to participants can be measured in terms of their reintegration into the labour market and their ability to achieve a better work-life balance. Users, employers and employees report high levels of satisfaction with the scheme, which continues to expand rapidly. Nevertheless, the success of the scheme with the public means that there are growing pressures on the initiative, with ever-increasing demand for the services provided by the vouchers against insufficient supply. With no ceiling on the number of vouchers issued, pressure is being exerted on the budget and recently-agreed changes by the government will see a small reduction in the level of subsidy paid to firms.

Aspects of Transferability

The service voucher approach generated a lot of interest among the Peer Review countries, which generally saw it as an effective, if comparatively expensive, method of tackling vulnerable groups on the labour market. Some peer countries had already implemented similar voucher or subsidy schemes, although they tended to have wider coverage of sectors and occupations than the Belgian case, and were less generous in terms of subsidy. Also, some countries saw a major potential benefit in helping bring some of those currently in the informal or undeclared sector into the regular labour market. In discussion some peer countries questioned the high level of subsidy inherent in the Belgian scheme, and raised doubts about value for money; queries were also posed regarding the potentially market-distorting impacts of the fixed-price model incorporated in the service voucher scheme, and regarding possible negative impacts through displacement and crowding-out effects. The relatively narrow focus on domestic services, and the dominance of women among beneficiaries of the programme led to suggestions for a broader approach (e.g. incorporating services such as gardening and household repair), and it was argued that the inclusion of childcare as an eligible service would also increase the benefits of the scheme from the point of view of women wishing to enter the labour market. Many countries saw scope for transferability of some variant of the scheme, although in some countries the potential for transferability would be limited by factors such as budget constraints and different levels of development of the domestic service market (in some countries there is little or no tradition of domestic services being conducted for payment by people outside the family).

Participating independent experts

• Friedrich SCHNEIDER

  Austria
  Johannes Keppler University
• Konstantin V. PASHEV

  Bulgaria
  Center for the Study of Demogracy
• Tomas SIROVATKA

  Czech Republic
  Masaryk University
• Merja KAUHANEN

  Finland
  Labour Institute for Economic Research
• Jean-Claude BARBIER

  France
  UMR CES-Matisse, Université Paris 1
• Karoly FAZEKAS

  Hungary
  Institut of Economics Hungarian Academy of Science
• Hjalti JOHANNESSON

  Iceland
  RHA - The Research Centre of the University of Akureyri
• Jekatarina DMITRIJEVA

  Latvia
  EPEE, Université d'Evry - Val-d'Essonne
• Lino BRIGUGLIO

  Malta
  Island Consulting Services
• Reinhard NAUMANN

  Portugal
  DINAMIA/ISCTE
• Catalin GHINARARU

  Romania
  The National Labour Research Institute of Romania
• Anne Sofie KOLM

  Sweden
  Stockholm University