02092cas a2200241 a 4500 AALejournalIMF008803 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451856934 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Unemployment Hysteresis, Wage Determination, and Labor Market Flexibility : The Case of Belgium. Washington, D.C. : International Monetary Fund, 1994. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the potential contribution of unemployment hysteresis theories to the understanding of the Belgian labor market. It estimates models of wage determination using aggregate and firm-level panel data. Two main conclusions emerge: (i) the long-term unemployed do not exert a negative impact on wages; and (ii) there is some evidence that the incumbent workers, the 'insiders,' exercise market power in wage determination, taking greater account of their own interests than those of the unemployed 'outsiders.' In addition, it is argued that the automatic indexation of wages to prices in Belgium can cause a downward rigidity in real wages, given the multi-tier real wage bargaining process. Recent initiatives, including the introduction of a competitiveness norm for indexation, and labor market programs aimed at the long-term unemployed and the young, such as the plan d'accompagnement and the plan d'embauche des jeunes, are appropriate in view of the existence of insider power in wage determination. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1994/150 Full text available on IMF http://elibrary.imf.org/view/journals/001/1994/150/001.1994.issue-150-en.xml IMF e-Library