This document discusses the Danish flexicurity model and its key features, including a combination of flexibility for employers and security for employees. It outlines the "golden triangle" of flexicurity consisting of liberal hiring and firing rules, unemployment benefits, and active labor market policies. While flexicurity has benefited many standard full-time workers, non-standard workers experience less coverage. The document calls for revitalizing flexicurity to better address contractual flexibility and provide social protections for more types of workers.

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13. FLEXICURITY AND THE FUTURE OF WORK:
LESSONS FROM DENMARK
Anna Ilsøe & Trine Pernille Larsen
June 2023

14. • Introducing Danish flexicurity
• Differences and similarities between Denmark and the UK
• Lessons for the future – what can we learn from Danish flexicurity?
OUTLINE

15. DANISH FLEXICURITY - KEY FEATURES
• Describes balances btw. flexibility & security on the labour market
• Assumes: flexibility & security policies- can be united btw. employers &
employees
Main argument: economic growth & competitiveness depend on high levels
of labour market flexibility combined with high degrees of social security

16. DANISH FLEXICURITY – THE GOLDEN TRIANGLE
External numerical
flexibility: liberal
hire/fire rules
Relatively high
unemployment benefits
Active labour market
policy
Source: Bredgaard et al. 2005
Motivation
Qualification

17. DANISH FLEXICURITY - DEFINITION
1) A combination of flexibility for employers and security for employees, implying a degree of
trade-off
2) This combination produces advantages for both employers and employees – so this is a positive
sum, rather than a zero-sum, game;
3) The degree of flexibility and security balance each other in a meaningful way, in depth, scope
and length
• depth refers to the extent of flexibility and security
• scope relates to which groups of workers are covered
• length refers to time, such as whether the flexibility and security occur simultaneously
Source: Ilsøe 2007

18. KEY FEATURES OF THE DANISH UNEMPLOYMENT
AND SOCIAL ASSISTANCE SYSTEMS
Unemployment benefit Social assistance
Underlying logic:
Insurance based:
membership of unemployment insurance
scheme
Citizen-based: universal
Income security:
Coverage rate:
Earnings related
75%
(non-standard workers: 55%)
Income-based: residual
All
Eligibility criteria:
Criteria for accrued
hours/income:
1 years membership
Workers: 1924 accrued working hours – last 3
years
(part-time insured: 1258 hours)
Self-employed: company closure & min. Income
€871.69 per month- last three years
Age: 30+ years
Assets: Less than 10.000 DKK/
€1342
Without rights to other social benefits
225 hours of paid work
Source: Larsen & Ilsøe 2023

19. A COMPARISON OF FLEXIBILITY AND SECURITY IN
DENMARK AND THE UK
Denmark UK
External numerical flexibility EPL: 1.5 EPL: 1.4
Income security
(unemployment benefits)
Coverage rate: 87 %
Replacement rate: 57 %
Coverage rate: 100 %
Replacement rate: 35 %
Active Labour Market Policies (expenditure as
percentage of GDP) 1.2 % 0.3 %
Employment rate 77 % 76 %
Unemployment rate 4.5 % 3.6 %
Long-term unemployment rate 0,5 % 1,2 %
Job to job mobility 10,7 % 11,3 %
EPL: Employment Protection Legislation Indicator. Low value means easy legal access to hiring and firing. (2019)
Job to job mobility: share of employed who changed jobs within the last year (2019). Source: Eurostat/LFS.
Coverage rate: share of workers covered by the unemployment insurance (2020)
Replacement rate: average replacement of former earnings via unemployment benefit including housing benefit (2022)
ALMP expenditure (2018)
Employment and unemployment rates (share of working population aged 15-64 years) (Q3 2022)
Source: OECD; Danske A-kasser.

20. THE DEVELOPMENT IN REPLACEMENT RATES: DENMARK,
THE UK, FRANCE AND GERMANY
Source: OECD. Figures are for a single person earning the average wage, without children, for a duration of 2 months, including
housing benefits and social assistance benefits.

21. DIFFERENT MEASURES OF NON-STANDARD WORK CONTRACTS
AS SHARE OF THE WORKING AGE POPULATION (15-64): DENMARK
Source: Rasmussen et al., 2021 and Authors own calculations based on Statistics Denmark, The Danish Labour Force
Survey, and Eurostat.

22. INTRODUCING CONTRACTUAL FLEXIBILITY
Contractual flexibility – a definition:
• Usage of contracts deviating from what is considered the traditional standard employment (the
full-time open-ended position with 30+ hours per week).
• Three main flexibility dimensions besides liberal hire/fire rules:
• Employment status: distinction between different forms of self-employment vis a vis the
traditional employee status
• Contract length: open-ended vis a vis temporary contracts
• Working time: number of working hours guaranteed are fewer than standard hours (30+
hours per week)

23. RECENT SURVEY (LARSEN ET AL. 2022): FROM NUMERICAL
FLEXIBILITY TOWARDS CONTRACTUAL FLEXIBILITY
• One in three non-standard workers on DK-labour
market- (LFS-data) – increased from 26% in 2000
• One in two of low wage workers (our survey)
• Marked sector variations
• Non-standard work esp. high in private services
53
16
30
22
61
27
35
31
48
44
33
76
39
27
34
74
47
56
63
76
65
50
0 20 40 60 80
Agriculture, forestry & fishing
Manufacturing
Construction
Transport
Hotels & restaurants
Public and Private administration &IT
Education
Health- & social care
Creative industries
Other
Total - general average
Own survey among low wage workers Non-standard workers
LFS-data Non-standard workers
Non-standard workers as share of all employed on the
Danish labour market aged 15-64 years, in percent
Source: Larsen et al. 2022.

24. RECENT SURVEY (LARSEN ET AL. 2022): INCOME
SECURITY – A PATCHY SAFETY NET
Many non-insured in case of unemployment – 45% - lower among
some groups
Many struggle to qualify for unemployment benefit, if insured:
• Not enough hours to meet minimum threshold for accrued working
hours
• Unpaid work widespread- one in three – higher among some groups
• Unpaid work – does not account towards accrued working hours
86
55
61
32
59
40
35
73
47
55
0 20 40 60 80 100
Full-time open-ended
contracts
Non-standard workers
Long part-time (16-30
hours)
Marginal part-time
work (less than 15…
Fixed-term contracts
Solo self-employed
Zero-hour contracts
Subcontracted workers
Students and people
on social benefits…
Students and people
on social benefits…
Membership of an unemployment benefit scheme,
Source: Larsen et al. 2022.

25. FLEXICURITY 2.0 (ILSØE & LARSEN 2022): REVISITING THE
GOLDEN TRIANGLE FROM A NON-STANDARD WORKERS
PERSPECTIVE
Contractual flexibility:
Shifts between work
tasks, odd jobs &
projects
Insurance based schemes,
changes to social protection –
legal extension & compulsory
membership or new eligibility
criteria?
Private education, online
courses, changes to further
training systems?
Source: Ilsøe & Larsen 2022.

26. SUMMING UP
• Danish flexicurity has been a success: combining high levels of numerical
flexibility with comparatively high levels of income security
• The Danish labour market is as flexible as the UK labour market (job
mobility, employment, unemployment)
• Recent trend in Denmark: employers increasingly utilise contractual
flexibility (employment status, contract length & working hours)
• The most flexible workers - non-standard workers - less covered by the
security elements in the Danish flexicurity model
• Calls for revitalising the Danish flexicurity model

27. FURTHER READINGS
Ilsøe A and Larsen TP (2023): Flexicurity and the future of work – lessons from Denmark. In Gavin K and
McCurdy C (eds.) (2023): The Economy 2030 Inquiry. London: The Resolution Foundation.
https://economy2030.resolutionfoundation.org/wp-content/uploads/2023/06/Flexicurity-and-the-
future-of-work.pdf
Ilsøe, A and Larsen, TP (eds.) (2021): Non-standard work in the Nordics – troubled waters under the still
surface. TemaNord No. 503. Copenhagen: The Nordic Councils of Ministers, 251 pages.
http://norden.diva-portal.org/smash/get/diva2:1525814/FULLTEXT01.pdf
Ilsøe A (2008): ‘The Danish Flexicurity Model - a Lesson for the US?’ in Hendrickx, Frank (ed.): Flexicurity
and the Lisbon Agenda. A Cross-Disciplinary Reflection. Social Europe Series vol. 17. Antwerp: Intersentia,
pp. 65-104. https://faos.ku.dk/english/pdf/publications/2007/fnotat81.pdf