The small country Denmark practices one of the most successful employment models in Europe. Since 1998, Denmark pushed the unemployment rate from 10.1% to 4.3% in 2001. Since then it has risen because of the bad economy to 5%. But all in all, the small kingdom could divide the unemployment in half within a few years. Amongst increasing jobs, the Danes generate every year budget surpluses and reduce public dept.
It is quite remarkable that in no other European country so many men and women flood the job market. In Denmark around 80% at the age between 15 and 64 years work or search for a job whereas for example in Germany only 70% of men and women in the same age group push towards the market.
The Danish employment model
In Denmark unemployed people obtain 90% of the final salary for at most four years. The unemployment benefit is in percentage higher the lower the income was. Additionally, they get a variety of private and public professional development and retraining.
At the latest one year of unemployment the “activation phase” begins. The unemployed persons have to participate in some measures. People who do not participate will not get any financial support first and foremost for five weeks. Unemployed people have to accept jobs with less money and a way to work of maximum four hours.
In Denmark a cancelation period exists, which depends on the period of employment, but there is no employment protection. The companies only have to pay the first two days of dismissal. That is one reason why in Denmark many jobs are created. The companies know that they have the possibility to dismiss an employee every time.
The average duration of employment is really low. At the same time, Danish people have less fear to lose their jobs than German and French people. The Danes know that they will get a high unemployment benefit and will quickly find a new job. Denmark only has a long-term unemployment of less than 20%. In Germany it amounts around 35%.
The job-rotation is another Danish idea to create employments. As an employee leaves temporarily his workplace, for example to make a professional development, an unemployed person gets this job. In 2010 60 secretaries got a professional development in Aarhus. The courses lasted 13 weeks. The companies scheduled these development measures that in total 16 unemployed people should get a job for one year. Finally, 24 people got a job, because some of them found a permanent position during this period.