Employment Protection, Unemployment Compensation and Activation in Europe
Globalization and Welfare series
Edited by Paul de Beer and Trudie Schils
Chapter 3: Denmark
Per Kongshøj Madsen INTRODUCTION1 In recent years, Denmark has drawn a lot of international attention. The highest employment rate in the EU, the low level of unemployment and an overall positive macroeconomic performance have made Denmark stand out in Europe. Furthermore, Denmark shows some interesting traits when it comes to the country’s combination of the well-known basic building blocks of a Nordic welfare state with some characteristics of more liberal market economies. Has the country found a third road between a flexible labour market on the one hand and security and welfare for its citizens on the other? Or in the words of the Organisation for Economic Co-operation and Development (OECD): Denmark provides an interesting combination of high labour market dynamism and relatively high social protection – the so-called flexicurity approach. Underlying the success of the Danish model is the combination of flexibility (a high degree of job mobility thanks to a low level of employment protection), social security (a generous system of unemployment benefits) and active labour market programmes. The Danish model of flexicurity thus points to a third way between the flexibility often attributed to deregulated Anglo-Saxon countries and strict job protection characterizing southern European countries. (OECD 2004, p. 97) Under the heading of the Danish ‘model of flexicurity’ the story about Denmark is often cast in terms of a well-functioning relationship between unemployment insurance, employment protection legislation and active labour market policy in the following configuration: ● ● A flexible labour market with a high level of external numerical...
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