Denmark

1. What is your evaluation of Poul Nyrup Rasmussen’s strategy for improving Denmark’s economic performance termed “flexicurity” implemented beginning in 1994?

Strength

Decrease of unemployment rate: More than two decades ago, Denmark was plagued by high unemployment rate of 9.7 percent, by adopting components of flexicurity, Denmark is able to shrink the level of unemployment dramatically to 1.8% in 2008. After implementing flexicuirity, even as recorded - if each year 200,000 jobs disappeared, than on the other hand 230,000 new one was created as well.

Flaws

Exclusion of immigrants: Under flexicutiry, immigrants are discouraged to enter into the labor market.

High personal Income tax:

2. Is Denmark’s economic performance over the next decade and a half because of, or despite its welfare state?

3. What shared values and beliefs among the majority of citizens of Denmark support the highest individual tax rate of all countries?

Denmark had the top highest individual income tax rate which started from 42 percent and reached to 68 percent for top earners.

Most equal income distribution

Who benefited from their higher tax rates

Homogenous population of more than 5.4 million, a strong sense of national identity.

Shared Values:

4. What aspects, if any, of the “flexicurity” strategy adopted in Denmark could be adopted successfully elsewhere, e.g., the United States?

The Danish Flexicurity model is often referred as the ‘golden triangle’ was first actively introduced by social democratic Prime Minister of Denmark in 1990’s. Primarily focus of this model is to strategically strengthen the flexibility for both employer and employee by creating a pro-active labor market policy (training program) mainly for modern welfare states. Prime Minister Poul Nyrup described flexicurity as relying on rights and duties: “People have the right to education and social protection and a duty to work and contribute to society”.

Wilthagen explains...