Transcript Labour Market Mobility in a Danish Perspective

Flexicurity - The Danish Active Labour Market
Policy: Can it Be Copied?
Thomas Qvortrup Christensen
Confederation of Danish Employers
CICERO FOUNDATION SEMINAR
Paris 15 February 2007
The Danish situation on Labour market
Low unemployment in relation to other EUMember States and a significant fall in
unemployment in the 90s.
Unemployment
Per cent
13
6,7
3,5
3,8
4,2
4,8
5,4
5,5
7,1
7,2
7,7
8
8,5
13,3
8,8
5,7
DK
NL
IE
LU
UK
EE
SI
IT
CZ
PT
EU25
BE
DE
FR
SK
PL
16
14
12
10
8
6
4
2
0
NOTE: September 2006.
SOURCE: Eurostat.
16
14
12
10
8
6
4
2
0
The Danish situation on Labour market
Low unemployment in relation to other EUMember States and a significant fall in
unemployment in the 90s.
Lowest unemployment since 70s ! –shortage
of labour
Among the countries with the highest
participation and employment rates.
Low youth-unemployment
Main characteristics of the Danish
employment policy
The active labour market policy in Denmark
has traditionally been built on a broad political
consensus
Close involvement of the social partners
– Support of active line
– Involved in the regional/local management and
implementation
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
Generous
Benefit system
Benefits
High compensation for
low-wage groups: 90 pct.
Active labour
Emphasis on
upgrading of skills
market policy
Test of availability
(ALMP)
Duration: 4 years
Motivation effect
ALMP
Average Job Tenure in OECD
Years
12
10
10
8
8
6
6
4
4
ICE
US
DK
UK
IE
NL
CZ
NO
HU
ES
CH
Fl
PT
PL
D
GR
SK
F
L
SE
B
IT
OECD
12
SOURCE: CEPS (2004).
Employment Security
Scale from 1-10 – the higher the number the more secure, 2001
(4,3)
(3,6)
(2,2)
(4,9)
(7,4)
(9,1)
(6,7)
(3,9)
(5,0)
(9,1)
(8,4)
(10,8)
(4,0)
NOTE: Figures in brackets are unemployment rates in 2001.
SOURCE: CEPS (2004) and Eurostat.
GR
PT
ES
FR
IT
UK
EIR
BE
FIN
DE
SE
NL
AT
(10,8)
DK
9
8
7
6
5
4
3
2
1
0
9
8
7
6
5
4
3
2
1
0
Participation in Continuing Education
Per cent of employed, 2003
50
50
40
40
30
30
20
20
10
10
0
0
IT
HU
GR
ES
PT
PL
NL
IE
CZ
LU
DE
BE
SK
FR
AT
CA
UK
CH
FI
US
DK
SE
NOTE: Covers non-formal job-related continuing education and training
over the previous 12 months.
SOURCE: OECD (2006).
Educational Costs at Company Level
Per cent of total labour costs for educational training in
private companies, 1999
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
EL
PT
AU
ES
DE
BE
IT
LUX
NO
EU-15
FI
FR
EI
NL
SE
DK
SOURCE: Eurostat (2002).
Regulation by Framework Agreements
 Collective agreements cover aprox. 90 pct. of
the employed in companies affiliated to DA
member federations
 Framework agreements
 Supplemented by agreements at company level
Employment Regulation
 Collective agreements the primary regulation:
Wages
Working time, overtime
Redundancies, shop stewards, extra holidays
Sickness pay, maternity leave, pension, training,
 Legislation only on specific topics:
Holidays
Health and safety
 Equal pay and equal treatment (sex, race, religion etc.)
Flexicurity in Europe?
Outcome of long history
Social partners role
Social security, pensions, health care are not
a part of a specific position
High degree of flexibility for all groups
ALMP – availability-testing and upgrading is
very expensive
Company structure. Mainly smaller firms
Challenges
Globalization
Ageing
Changes to the Danish system – dynamics is
crucial
Low Availability of Unemployed
Per cent of unemployed, 2005
Do not wish to work
Do not seek work
Not able to attend work
50
50
40
40
30
30
20
20
10
10
0
0
15-24
25-29
30-49
50-59
60-66 Years
old
SOURCE: Special report from Statistics Denmark.
Making Work Pay
Incentives to work for the lowest paid
are small
26 per cent of the unemployed gain
less than 70 Euro/month if they get a
job.
12 per cent of the employed gain
less than 70 Euro/month compared
with the unemployment benefit.
5 per cent of the employed earn less
than if they were unemployed.
SOURCE: Rockwool Foundation (2003).