This paper studies wage increases in Belgium over the period 2000-2010. It specifically aims to determine to which extent the evolution of the characteristics of the labour force (composition effects) has affected those increases. To this end, we analyse, both at the aggregate and disaggregated level, the average real wage increases in 28 industries using data from the Structure and Distribution of Earnings Survey. Together with data from the National Social Security Office, this survey offers detailed information on wages and on a large number of labour force characteristics. Our analysis is mainly based on the wage decomposition method introduced by Oaxaca (1973) and Blinder (1973).
Our results reveal substantial composition effects during the period under review, both at the aggregate level and within individual industries. Composition effects play a decisive role in the wage increases of white collar workers, but their contribution is on average negative and considerably smaller for blue collar workers. At the aggregate level, the increase in the average age of employees and in their education level and the growing number of certain better paid professional categories have contributed the most to the wage increases during that period. On the other hand, the sectoral distribution of employment, the expansion of part-time work and the higher participation rate of women in the labour market have, though to a lesser extent, brought about wage decreases.