The Fiscal and Distributional Impact of Reforming Unemployment Benefits in Belgium

This Economic Brief analyses the budgetary and distributional impact of the Belgian unemployment benefit reform based on the EUROMOD simulation model.

Highlights

• Belgium’s employment rate remains comparatively low, partly because labour taxes are high and, until 1 January 2026, unemployment benefits had no time limit. This may have reduced incentives for jobseekers to return to work.
• In 2025, Belgium’s federal government introduced a reform setting a maximum duration for unemployment benefits, ending Belgium’s status as the only EU country without such a limit.
• Using EUROMOD micro-simulations, the note finds that the reform should produce net budgetary savings even without employment effects. If more jobseekers return to work, savings could reach EUR 2.1 billion. Effects on poverty and inequality are expected to remain limited overall.

Information and identifiers

Economic Brief 94. July 2026. Brussels. PDF. 22pp. Tab. Graph. Bibliogr. Free.

KC-01-26-061-EN-N (online)
ISBN 978-92-68-41969-4 (online)  
ISSN 2443-8030  (online)
doi:10.2765/4778119 (online) 

JEL classification: H53, J65, J68, D31, I38, C63.

Disclaimer

European Economy Economic Briefs are written by the staff of the European Commission’s Directorate-General for Economic and Financial Affairs to inform discussion on economic policy and to stimulate debate. The views expressed in this document are solely those of the author(s) and do not necessarily represent the official views of the European Commission.