Department of Economics and Business Economics

Danish Flexicurity: Rights and Duties

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Danish Flexicurity: Rights and Duties. / Kreiner, Claus Thustrup; Svarer, Michael.

In: Journal of Economic Perspectives, Vol. 36, No. 4, 11.2022, p. 81-102.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Harvard

Kreiner, CT & Svarer, M 2022, 'Danish Flexicurity: Rights and Duties', Journal of Economic Perspectives, vol. 36, no. 4, pp. 81-102. https://doi.org/10.1257/jep.36.4.81

APA

Kreiner, C. T., & Svarer, M. (2022). Danish Flexicurity: Rights and Duties. Journal of Economic Perspectives, 36(4), 81-102. https://doi.org/10.1257/jep.36.4.81

CBE

Kreiner CT, Svarer M. 2022. Danish Flexicurity: Rights and Duties. Journal of Economic Perspectives. 36(4):81-102. https://doi.org/10.1257/jep.36.4.81

MLA

Kreiner, Claus Thustrup and Michael Svarer. "Danish Flexicurity: Rights and Duties". Journal of Economic Perspectives. 2022, 36(4). 81-102. https://doi.org/10.1257/jep.36.4.81

Vancouver

Kreiner CT, Svarer M. Danish Flexicurity: Rights and Duties. Journal of Economic Perspectives. 2022 Nov;36(4):81-102. doi: 10.1257/jep.36.4.81

Author

Kreiner, Claus Thustrup ; Svarer, Michael. / Danish Flexicurity: Rights and Duties. In: Journal of Economic Perspectives. 2022 ; Vol. 36, No. 4. pp. 81-102.

Bibtex

@article{b1c5fad200a24eabab0800f6d11ff638,
title = "Danish Flexicurity: Rights and Duties",
abstract = "Denmark is one of the richest countries in the world and achieves this in combination with low inequality, low unemployment, and high-income security. This performance is often attributed to the Danish labor market model characterized by what has become known as flexicurity. This essay describes and evaluates Danish flexicurity. The Danish experience shows that flexicurity in itself, that is, flexible hiring and firing rules for firms combined with high income security for workers, is insufficient for successful outcomes. The flexicurity policy also needs to include comprehensive active labor market programs (ALMPs) with compulsory participation for recipients of unemployment compensation. Denmark spends more on active labor market programs than any other OECD country. We review theory showing how ALMPs can mitigate adverse selection and moral hazard problems associated with high income security and review empirical evidence on the effectiveness of ALMPs from the ongoing Danish policy evaluation, which includes a systematic use of randomized experiments. We also discuss the aptness of flexicurity to meet challenges from globalization, automation, and immigration and the trade-offs that the United States (or other countries) would face in adopting a flexicurity policy. ",
author = "Kreiner, {Claus Thustrup} and Michael Svarer",
year = "2022",
month = nov,
doi = "10.1257/jep.36.4.81",
language = "English",
volume = "36",
pages = "81--102",
journal = "Journal of Economic Perspectives",
issn = "0895-3309",
publisher = "American Economic Association",
number = "4",

}

RIS

TY - JOUR

T1 - Danish Flexicurity: Rights and Duties

AU - Kreiner, Claus Thustrup

AU - Svarer, Michael

PY - 2022/11

Y1 - 2022/11

N2 - Denmark is one of the richest countries in the world and achieves this in combination with low inequality, low unemployment, and high-income security. This performance is often attributed to the Danish labor market model characterized by what has become known as flexicurity. This essay describes and evaluates Danish flexicurity. The Danish experience shows that flexicurity in itself, that is, flexible hiring and firing rules for firms combined with high income security for workers, is insufficient for successful outcomes. The flexicurity policy also needs to include comprehensive active labor market programs (ALMPs) with compulsory participation for recipients of unemployment compensation. Denmark spends more on active labor market programs than any other OECD country. We review theory showing how ALMPs can mitigate adverse selection and moral hazard problems associated with high income security and review empirical evidence on the effectiveness of ALMPs from the ongoing Danish policy evaluation, which includes a systematic use of randomized experiments. We also discuss the aptness of flexicurity to meet challenges from globalization, automation, and immigration and the trade-offs that the United States (or other countries) would face in adopting a flexicurity policy.

AB - Denmark is one of the richest countries in the world and achieves this in combination with low inequality, low unemployment, and high-income security. This performance is often attributed to the Danish labor market model characterized by what has become known as flexicurity. This essay describes and evaluates Danish flexicurity. The Danish experience shows that flexicurity in itself, that is, flexible hiring and firing rules for firms combined with high income security for workers, is insufficient for successful outcomes. The flexicurity policy also needs to include comprehensive active labor market programs (ALMPs) with compulsory participation for recipients of unemployment compensation. Denmark spends more on active labor market programs than any other OECD country. We review theory showing how ALMPs can mitigate adverse selection and moral hazard problems associated with high income security and review empirical evidence on the effectiveness of ALMPs from the ongoing Danish policy evaluation, which includes a systematic use of randomized experiments. We also discuss the aptness of flexicurity to meet challenges from globalization, automation, and immigration and the trade-offs that the United States (or other countries) would face in adopting a flexicurity policy.

U2 - 10.1257/jep.36.4.81

DO - 10.1257/jep.36.4.81

M3 - Journal article

VL - 36

SP - 81

EP - 102

JO - Journal of Economic Perspectives

JF - Journal of Economic Perspectives

SN - 0895-3309

IS - 4

ER -