Danish labor market policy has traditionally been more characterized by flexibility, but with relatively high income safety - the so-called flexicurity model. This is a model that is under investigation in many European countries because it provides a more flexible and mobile labor market, making it relatively easy to get a new job when being unemployed.

The disadvantage is that the Danish flexicurity model has a demand for a continued high tax burden because replacement rates are high for a long time, but the success lies in a high labor force participation among older and younger individuals.

Employment security between "permanent employment" and a "temporary employment" in Denmark is very small, unlike, for example Sweden and Germany, where the differences are much greater.

At an index comparison from 2008 (index in parenthesis) in regards to employment safety at the permanent job, the U.S. has (0.5), Great Britain (1.25) and Denmark (1.5) a significantly lower employment safety than countries such as Sweden (2,75), Holland (2.80) and Germany (2.90).

If an initial unemployment compensation is compared between those countries, the differences are smaller. Percentage in parentheses of an average salary: Great Britain (50%), United States (62%), Sweden (64%), Denmark (71%), Germany (72%) and Holland (74%).

However, if the comparison is based on a rate of one or more periods of unemployment which occurred during a period of 60 months the result follows by an average salary, United States (5%), Germany (35%), Holland (37%), Sweden (42% ), Britain (58%) and Denmark (65%).

Denmark has done well bringing down the high unemployment from the crisis in the 90s, which then stood at nearly 10 percent, to a level of 3 percent by mid-2008 but has now risen to 6.2 percent in June of 2009. Sweden has had a continuous rise in unemployment, higher than Denmark, and now in June 2009 the Swedish unemployment rate was at 9 percent.

Comparing youth unemployment between Sweden and Denmark, a significant difference exist, over 11 percent of young people in Denmark were unemployed during the month of June compared with 30 percent in Sweden in June 2009.


The Danish experience with its labor policies may be summarized.

• Reduced employment protection does not necessarily mean less employment and income safety.

• Instead, it may be an employer's willingness to take risks with new recruitments and employee's ability to change jobs that create security.

• The Danish labor rules contribute to a more mobile labor market, numbers of years in service is important which means that there is a low lock-in effect.

Apprenticeship system and direct action to increase employability of young people has proven to be effective in Denmark.

   
                                                                                          Cecilia Helland