Employment Deindustrialisation and the Deterioration of Employment Prospects for Low-Skill Workers: Can the Mortensen-Pissarides framework explain the Belgian facts?

This thesis attempts to make sense of several contemporaneous phenomena that have been observed in Belgium since the seventies: a rising labour productivity but declining employment in the manufacturing sector, a long-lasting rise in aggregate unemployment and a particular deterioration of employment prospects for low-educated workers. As the story is shared by many occidental economies, the literature on the topic has flourished. Yet, I show that neither the original version of the Mortensen-Pissarides framework, not the existing extensions about which I have knowledge of are totally suited to shed light on plausible mechanisms that may have produced the observed facts. Next, I provide an intuitive discussion on how the model could be made consistent with the facts and the literature on sectoral change.