Denmark’s flexicurity system, which puts great emphasis on employee-management dialogue and protects individuals rather than jobs, is often cited as being exemplary. Denmark’s employment rate is higher than that of most European countries. What’s more, it has a lower level of income inequality. It’s worth taking an in-depth look at a system that is generating a great deal of interest.
Three pillars of Denmark’s flexicurity model
The exact shape of the flexicurity model is continually changing. Accordingly, the length of time for which the unemployed receive benefits has been cut since the 2008 crisis with the deterioration in the public finances. That said, the model has kept all its basic hallmarks, which are mainly the result of the reforms introduced from the mid-1990s to combat a high unemployment rate.
In particular, the aim was to provide both flexibility and security in the labour market by enabling businesses to hire and fire employees easily according to trends in their business, while giving individuals sufficient income should they lose their job (see charts 1 and 2).
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by Catherine STEPHAN