Belgium has implemented, following the example of other coun- tries, in-work benefit policies since the early 2000’s, with the objective of mak- ing work pay and doing so, get more people at work. Belgian in-work benefits differ from most other in-work benefits as eligibility requires low hourly earn- ings. Their generosity tends to increase over time. We study the effects further extensions of those benefits would have both on labour supply and welfare, us- ing a random-utility - random-opportunity model estimated on cross-sectional SILC datasets. Results show that further increasing the benefits will mostly slightly increase labour supply and welfare of low-to-middle welfare deciles, but at very high net cost per job created. We compare our results with existing re- search and explain some mechanisms that possibly lead to an underestimation of negative intensive margin labour supply responses in previous simulations.
Keywords : labor economics, policy evaluation,