Danish Flexicurity Model

Latest IMF Survey summarizes the features of the Danish Flexicurity model of its labour market - a uniquely Danish blend of a flexible labour market, generous social security and an active labour-market policies;

Labor market flexibility. Measured by how restrictive employment protection legislation is, the Danish labor market is more flexible than that in many other European countries. In practice, this means that Danish employers, both in the public and private sectors, can lay off workers rather easily. This is not a novel aspect of the Danish social system— protection against dismissal has historically been low, a feature that has been linked to the country’s openness and its many small and medium-sized enterprises.

An extensive social safety net. Danes enjoy a high level of social protection, including generous unemployment benefits. The average net replacement rate (what people receive from the state when they lose their jobs, calculated as a percentage of their salary) is about 80 percent, among the highest in Europe.

Active labor market policies. A large variety of labor market programs facilitate and encourage reintegration of the unemployed into the labor market. But these programs are expensive. As a result, Denmark is at the top in terms of its per capita spending on labor market programs.


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This page contains a single entry by Paul published on November 4, 2006 4:19 PM.

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