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Danish Labour Market Policy: Is it worth it?

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  • Westergaard-Nielsen, Niels

    ()
    (Centre for Labour Market and Social Research, Aarhus School of Business)

Abstract

Denmark has been quite succesfull in reducing unemployment. At the same time the costs of creating activation and other schemes have been very high. OECD judges that total costs are about 5% of GDP, which is the highest amount among OECD-countries. This paper presents a comprehensive description of the recent Danish labour market policies. The paper goes through all the different programmes and shows that most of the measures introduced have increased the reservation wages of job seekers. The result was a sharp growth in the number of participants on a number of new programmes for the unemployed and for those seeking alternatives to work. The total number of people on some sort of passive or active scheme rose until late in the 90’s where admission to programmes was restricted and a strong economic upswing created new demand for labour. A final analysis of the probability that an unemployed person becomes employed, based on individual transition data, shows that the new labour market policies introduced after 1993 did not increase the probability that an unemployed person would get a job. However, there is a positive effect in 1997 and 1998 coinciding with the attempts to tighten admission to labour programmes.

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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research in its series CLS Working Papers with number 01-10.

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Length: 20 pages
Date of creation: 01 Nov 2001
Date of revision:
Handle: RePEc:hhs:aarcls:2001_010

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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 48 66 88
Fax: + 45 86 15 01 88
Web page: http://www.cls.dk
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Keywords: Unemployment; Labour market policies; Denmark;

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References

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  1. An, Mark Yuying, 1996. "Statistical Inference of a Bivariate Proportional Hazard Model with Grouped Data," Working Papers 96-06, Duke University, Department of Economics.
  2. Bowlus, A-J & Kiefer, N-M & Neumann, G-R, 1996. "Fitting Equilibrium Search Models to Labor Market Data," UWO Department of Economics Working Papers 9601, University of Western Ontario, Department of Economics.
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  5. Gubta, Nabanita Datta & Oaxaca, Ronald L. & Smith, Nina, 2002. "Swimming Upstream, Floating Downstream: Trends in the U.S. and Danish Gender Wage Gaps," CLS Working Papers 01-6, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
  6. Bowlus, Audra J & Kiefer, Nicholas M & Neumann, George R, 1995. "Estimation of Equilibrium Wage Distributions with Heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(S), pages S119-31, Suppl. De.
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  13. Bingley, Paul & Gubta, Nabanita Datta & Pedersen, Peder J., 2001. "The Effects of Pension Programme Incentives on Retirement Behavior in Denmark," CLS Working Papers 01-8, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
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  15. Pedersen, Peder J. & Smith, Nina, 2001. "International Migration and Migration policy in Denmark," CLS Working Papers 01-5, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
  16. Kiefer, Nicholas M & Steel, Mark F J, 1998. "Bayesian Analysis of the Prototypal Search Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(2), pages 178-86, April.
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Cited by:
  1. Guillaume Blache, 2011. "Active labour market policies in Denmark: A comparative analysis of post-program effects," Documents de travail du Centre d'Economie de la Sorbonne 11071, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  2. Karanassou, Marika & Sala, Hector & Salvador, Pablo F., 2006. "The (Ir)relevance of the NRU for Policy Making: The Case of Denmark," IZA Discussion Papers 2397, Institute for the Study of Labor (IZA).
  3. Olivier Blanchard, 2006. "European unemployment: the evolution of facts and ideas," Economic Policy, CEPR & CES & MSH, vol. 21(45), pages 5-59, 01.
  4. repec:hal:cesptp:halshs-00654181 is not listed on IDEAS

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