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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. Bontemps, Christian & Robin, Jean-Marc & van den Berg, Gerard J, 2000. "Equilibrium Search with Continuous Productivity Dispersion: Theory and Nonparametric Estimation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(2), pages 305-58, May.
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  8. Gupta, N.D. & Oaxaca, R.L. & Smith, N., 1998. "Wage Dispersion, Public Sector Wages and the Stagnating Danish Gender Wage Gap," Papers 98-18, Centre for Labour Market and Social Research, Danmark-.
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  13. 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.
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  19. Bingley, Paul & Eriksson, Tor & Werwatz, Axel & Westergård-Nielsen, Niels, 1999. "Beyond manucentrism: Some fresh facts about job and worker flows," SFB 373 Discussion Papers 1999,74, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
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Citations

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Cited by:
  1. 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).
  2. repec:hal:cesptp:halshs-00654181 is not listed on IDEAS
  3. 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.
  4. Olivier Blanchard, 2005. "European Unemployment: The Evolution of Facts and Ideas," NBER Working Papers 11750, National Bureau of Economic Research, Inc.

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