Centre for Labour Market Research (CARMA) Aalborg University, Denmark Beyond flexicurity: Labour market policy adjustments and welfare reform in Denmark in the wake of the financial crisis Mads Peter Klindt, Assistant Professor, PhD Center for Labour Market Research (CARMA) Aalborg University [email protected]Presentation at the MSE, Centre d’Economie de la Sorbonne, Paris May 27, 2011
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Mads Peter Klindt, Assistant Professor, PhD Center for Labour Market Research (CARMA)
Beyond flexicurity: Labour market policy adjustments and welfare reform in Denmark in the wake of the financial crisis. Mads Peter Klindt, Assistant Professor, PhD Center for Labour Market Research (CARMA) Aalborg University [email protected] - PowerPoint PPT Presentation
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Centre for Labour Market Research (CARMA)Aalborg University, Denmark
Beyond flexicurity: Labour market policy adjustments and welfare reform in Denmark in
the wake of the financial crisisMads Peter Klindt, Assistant Professor, PhD
• The Danish model of flexicurity as it was• Governance reform and policy changes in
2007/09• Rigging the ship: Small labour market
adjustments in the wake of the crisis outbreak • Changing the course: Debt crisis and new
reform agenda• Beyond flexicurity: New dynamics on the
Danish labour market
3
Denmark’s ‘Golden Triangle’ of flexicurity
Aktiv arbejds-
markeds-politik
Traditionelt samspil mellem fleksibilitet og sikkerhed siden 1899/1907 (1969)
Arbejdsmarkedspolitikkens trusselseffekt (2001-)
Opvalificering og omallokering (1994-2001)
Fleksibeltarbejds-marked
Generøse overførsels-indkomster
3
2007/09: Governance reform
Insured (unemployment
benefits)
Uninsured(means tested
social assistance)
Local government(91 Municipalities)
One-stop-shop jobcentres
Ministry of EmploymentState financesu.b. and
activation
Local gov.partly finances
social assistance
Local government take over full responsibility
(50/30 % of benefit payments
reimbursed)
Small adjustments during 2009
• Activation of young persons between 15 - 17• Immediate activation of people between 18-19
year old (ordinary education on ordinary conditions or job training on similar benefit).
• Stronger effort to combat long term unemployment among people aged18-30 (task force, screening of writing skills, regional planning)
• Altogether 500 mio. DKK
2010: Economic restoration plan
Unemployment benefits maximum duration cut from 4 to 2 years (1,3 billion DKK)Eligibility rules tightenedCVT-allowance reduced by 20 percentTax deduction for trade union membership fee reduced+ loads of other initiativesAltogether public spending cut by 24 billion DKK
2011: Reform package 2020
• Further initiatives to cut down public spending (23 billion DKK)
• Most importantly reforms of the early retirement scheme (efterløn) and old age pension
Retirement age will increase according increase in average
lifespan
Early retirement scheme will be reduced from 5 to 3 years and
become less attractive for people with labour market pensions
Incremental developments since the 1990s
• Falling UB compensation rates• Traditional trade unions loose members• Active labour market policy much more focused