The Danish Labour Market and the Seniors, Labour Market Policy and ´soft´ Initiatives September 2008, Senior Adviser Leif Christian Hansen, The National Labour Market Authority, www.ams.dk , www.bm.dk

The Danish flexicurity triangle Flexible labour market Unem-ployment benefits Active LMP Low employment protection: Easy to hire and fire High job and worker-mobility Rapid structural change: 800.000 job openings, 250.000 jobs disappear, >250.000 new jobs 420.000 unemployment spells Income security 4 years duration incl. activation, High compensation for low-wage groups (90%), average replacement rate app. 65% Employment security Active labour market policy, Activation, Right and duty, Individual Job Plan

Key figures 2007-08 Population: 5,4 mill (16-66: 3,7 mill), Labour force: 2,9 mill Participation rate: 78 % (women 73 %, men 80%, 55-59 years, 78 %, 60-66 years 40 %) Unemployment July 2008 44,000 – 1,6 %, Women 1,7 %, 1,6 - 25 years 1,2 %, 50-66 years 1,5 % Persons in activation 39,500 – 1,4 % 150.000 absence due to illness – 5,0 % Pension age: 65/Average retirement age: 62 Members of Unemployment Insurance Funds 80-85 % Unionization rate: 75-80 % Collective agreement coverage: 70-75 % GNP 1,650,000 million DKK (1 EURO = 7,45 DKK) GNP growth 3,2 %, Inflation 1,1 % Labour market policy budget 2008: 74,000 million DKK (25 % active, 75 % passive)

Population: 5,4 mill (16-66: 3,7 mill), Labour force: 2,9 mill

Participation rate: 78 % (women 73 %, men 80%, 55-59 years, 78 %, 60-66 years 40 %)

Unemployment July 2008 44,000 – 1,6 %, Women 1,7 %, 1,6 - 25 years 1,2 %, 50-66 years 1,5 %

Persons in activation 39,500 – 1,4 %

150.000 absence due to illness – 5,0 %

Pension age: 65/Average retirement age: 62

Members of Unemployment Insurance Funds 80-85 %

Unionization rate: 75-80 %

Collective agreement coverage: 70-75 %

GNP 1,650,000 million DKK (1 EURO = 7,45 DKK)

GNP growth 3,2 %, Inflation 1,1 %

Labour market policy budget 2008: 74,000 million DKK (25 % active, 75 % passive)

Labour market challenges: Labour shortage – short and long run Where are the options (groups with surplus unemployment and lower rate of participation): ” Paradox” unemployed – better matchning Young persons – earlier study completion Older workers and retired workers Marginalised unemployed (transfer recipients) Immigrants and descendants (2 and 3 generation) High absence due to illness Disability pension International recruitment ( www.workindenmark.dk ) 3 recruitment service centers Campaigns etc .

Where are the options (groups with surplus unemployment and lower rate of participation):

” Paradox” unemployed – better matchning

Young persons – earlier study completion

Older workers and retired workers

Marginalised unemployed (transfer recipients)

Immigrants and descendants (2 and 3 generation)

High absence due to illness

Disability pension

International recruitment ( www.workindenmark.dk )

3 recruitment service centers

Campaigns etc .

Ageing and employment policy. Key factors - intertwined Labour market incentives – legislation Retirement Schemes Unemployment Insurance Activation Measures Senior jobs in the municipalities Wage subsidy scheme in private sector Vocational Training Prevention of Attrition ´Soft´ initiatives Attitudes concerning age and work Mainstreaming!

Labour market incentives – legislation

Retirement Schemes

Unemployment Insurance

Activation Measures

Senior jobs in the municipalities

Wage subsidy scheme in private sector

Vocational Training

Prevention of Attrition

´Soft´ initiatives

Attitudes concerning age and work

Mainstreaming!

Welfare Reform 2006 Voluntary Early Retirement Pay : Age will be lifted from 60 to 62 years 2019-2022 Indexation to mean life expectancy of 60 years old from 2025 Old Age Pension : Age will be lifted from 65 to 67 years 2024-2027 Indexation to mean life expectancy from 2030

Voluntary Early Retirement Pay : Age will be lifted from 60 to 62 years 2019-2022

Indexation to mean life expectancy of 60 years old from 2025

Old Age Pension : Age will be lifted from 65 to 67 years 2024-2027

Indexation to mean life expectancy from 2030

Unemployment insurance and activation – Welfare Reform 2006 Negative incentives (mainstreaming) Abolishing prolonged unemployment benefits for 55-59 years 58-59 year old unemployed have to be activated Positive incentives (transition period) Seniorjob: 55-59 losing their right to unemployment subsiby are entitled to a job in the municipality Unemployed 55+ are entitled to a wage subsidy if they find a job in a private enterprise

Negative incentives (mainstreaming)

Abolishing prolonged unemployment benefits for 55-59 years

58-59 year old unemployed have to be activated

Positive incentives (transition period)

Seniorjob: 55-59 losing their right to unemployment subsiby are entitled to a job in the municipality

Unemployed 55+ are entitled to a wage subsidy if they find a job in a private enterprise

Prevention Fund – Welfare Reform 2006 Prevent attrition in the labour market Activities to prevent premature withdrawal DKK 3 billion, Euro 400 million Activities Prevent routines and functions leading to attrition Develop new routines for prevention Better rehabilitation of sick and disabled Increase awareness about risks connected to smoking, alcohol, physical inactivity and obesity The Social Partners involved

Prevent attrition in the labour market

Activities to prevent premature withdrawal

DKK 3 billion, Euro 400 million

Activities

Prevent routines and functions leading to attrition

Develop new routines for prevention

Better rehabilitation of sick and disabled

Increase awareness about risks connected to smoking, alcohol, physical inactivity and obesity

The Social Partners involved

New measures 2008 - Jobplan Strengthened economic incentives: Easing the income-testing of old age pension for income from work – incentive to work as pensioner A tax-reduction on income from work amounting approx. 13.400 EURO for 64 year olds - incentive to stay on the labour market

Strengthened economic incentives:

Easing the income-testing of old age pension for income from work – incentive to work as pensioner

A tax-reduction on income from work amounting approx. 13.400 EURO for 64 year olds - incentive to stay on the labour market

`Soft Initiatives´ Free consultancy assistance to employers Funding local development projects Local senior networks for unemployed Campaigns and awards Think Tank Best practice and knowledge, Individual senior contracts (www.seniorpraksis.dk)

Free consultancy assistance to employers

Funding local development projects

Local senior networks for unemployed

Campaigns and awards

Think Tank

Best practice and knowledge, Individual senior contracts (www.seniorpraksis.dk)

Employment Rate 1997 and 2006, age groups

Development of employment, age groups Employment rate 55-59: 75,8 pct. in 2006