The Danish Model of Flexicurity An Active Labour

“The Danish Model of ‘Flexicurity’ – An Active Labour Market Strategy for Older Workers” International Seminar for Experts organised in the series Great Debates by the Cicero Foundation Paris 10 and 11 March 2005 Thomas Qvortrup Christensen

Outline • • The Danish labour market Flexicurity Special cases for older workers Summary

The Danish situation on the labour market • Low unemployment in relation to other EU Member States and a significant fall in unemployment in the 90 s. • Among the countries with the highest participation and employment rates. • But, at the same time, we are the country with the biggest number of people on public support. • Demographic challenge: More people in the high age groups - fewer in the work force.

Unemployment in Denmark, 1991 -2003

Persons on transfer payments, 1970 -2003

Inside and outside labour market

Characteristics of the Danish employment policy • The active labour market policy in Denmark has traditionally been built on a broad political consensus. • A high degree of regionalisation of the administration 14 independent regions/counties in Denmark. • Close involvement of the social partners: • In connection with labour marker reforms, the social partners have supported the active line. • Involvement of the social partners in the regional management and implementation of the measures.

The Danish flexicurity model High flexibility Flexible Labour market Many job openings: • 800. 000 job shifts per year • 300. 000 new jobs per year • 300. 000 jobs disappear each year Qualification effect ALMP Generous Active labour benefitsystem market policy (ALMP) Benefits High compensation for low-wage groups: 90 pct. Duration: 4 years Motivation effect Emphasis on upgrading of skills Test of availability

Latest labour market reform “More people at employment” 2002 • • The vision of the one string system More direct ways into employment External stakeholders It should pay to work • Away from the flexicurity model

Older workers in a flexicurity context • Rules for older workers – Early retirement benefit – Longer UI for unemployed older than 55 years – Forced early retirement for 60 + if unemployed more than 2½ years – Activation from 6 months for 60+

Activation 50 years+

Share of long-term unemployed 50 years +

Unemployment and activation 50 years+

Unemployment in Sweden and Denmark

Summary • Can the Danish model be adopted ? • Challenges for the Danish flexicurity model • The older workers

Labour force and employed

The Danish flexicurity model The labour market employed 2, 8 mill. Unemployment insurance 180, 000 persons recieving unemployment benefits Active labour market policy