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The Danish Flexicurity Labour Market During the Great Recession

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  • Torben Andersen

Abstract

Can the Danish flexicurity model cope with a deep recession, or will long-term unemployment increase and the social safety net become overburdened? The Danish economy has experienced a boom-bust pattern ending with a large drop in GDP and thus labour demand. So far, the flexicurity model has coped with the Great Recession in the sense that gross flows in the labour market remain high, most unemployment spells are short, and there are no strong indications of increases in long-term unemployment. There are thus no signs that the large and prolonged aggregate demand shock is causing an increase in structural unemployment. Active labour market policies and fiscal space to accommodate the crisis are important in accounting for the performance of the model. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Torben Andersen, 2015. "The Danish Flexicurity Labour Market During the Great Recession," De Economist, Springer, vol. 163(4), pages 473-490, December.
    • Handle: RePEc:kap:decono:v:163:y:2015:i:4:p:473-490
    DOI: 10.1007/s10645-015-9260-1
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    References listed on IDEAS

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    1. Torben M. Andersen, 2015. "A flexicurity labor market during recession," IZA World of Labor, Institute of Labor Economics (IZA), pages 173-173, July.
    2. Alejandro Cuñat & Marc J. Melitz, 2012. "Volatility, Labor Market Flexibility, And The Pattern Of Comparative Advantage," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 225-254, April.
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    4. Torben M. Andersen & Michael Svarer, 2007. "Flexicurity: Labour Market Performance in Denmark," CESifo Economic Studies, CESifo Group, vol. 53(3), pages 389-429, September.
    5. Christian M. Dahl & Daniel le Maire & Jakob R. Munch, 2013. "Wage Dispersion and Decentralization of Wage Bargaining," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 501-533.
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    7. Torben Andersen & Michael Svarer, 2012. "Active labour market policies in a recession," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-19, December.
    8. Pierpaolo Parrotta & Dario Pozzoli, 2012. "The effect of learning by hiring on productivity," RAND Journal of Economics, RAND Corporation, vol. 43(1), pages 167-185, March.
    9. John Martin, 2015. "Activation and active labour market policies in OECD countries: stylised facts and evidence on their effectiveness," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-29, December.
    10. Michael W. L. Elsby & Bart Hobijn & Ayşegül Şahin, 2013. "Unemployment Dynamics in the OECD," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 530-548, May.
    11. Torben Andersen, 2012. "A Flexicurity Labour Market in the Great Recession: The Case of Denmark," De Economist, Springer, vol. 160(2), pages 117-140, June.
    12. John Martin & Stefano Scarpetta, 2012. "Setting It Right: Employment Protection, Labour Reallocation and Productivity," De Economist, Springer, vol. 160(2), pages 89-116, June.
    13. Per Madsen, 2013. "“Shelter from the storm?” - Danish flexicurity and the crisis," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-19, December.
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    Cited by:

    1. Bas Weel, 2015. "Unemployment: The Great Recession and Beyond," De Economist, Springer, vol. 163(4), pages 405-413, December.
    2. Ghoshray, Atanu & Ordóñez, Javier & Sala, Hector, 2016. "Euro, crisis and unemployment: Youth patterns, youth policies?," Economic Modelling, Elsevier, vol. 58(C), pages 442-453.
    3. Yann Thommen, 2019. "Réformes structurelles et résilience des marchés du travail en zone euro," Bulletin de l'Observatoire des politiques économiques en Europe, Observatoire des Politiques Économiques en Europe (OPEE), vol. 41(1), pages 21-32, November.
    4. Yann Thommen, 2019. "Réformes structurelles et résilience des marchés du travail en zone euro," Post-Print hal-04048450, HAL.
    5. Abildgren, Kim & Kuchler, Andreas, 2023. "Firm behaviour under negative deposit rates," European Economic Review, Elsevier, vol. 151(C).
    6. Yann Thommen, 2019. "Réformes structurelles et résilience des marchés du travail en zone euro," Bulletin de l'Observatoire des politiques économiques en Europe, Observatoire des Politiques Économiques en Europe (OPEE), vol. 41(1), pages 21-32, December.
    7. Torben M. Andersen, 2016. "Automatic stabilizers—the intersection of labour market and fiscal policies," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-18, December.
    8. Kovacs, Oliver, 2018. "The dark corners of industry 4.0 – Grounding economic governance 2.0," Technology in Society, Elsevier, vol. 55(C), pages 140-145.
    9. Benjamin Heslop & Antony Drew & Elizabeth Stojanovski & Kylie Bailey & Jonathan Paul, 2018. "Collaboration Vouchers: A Policy to Increase Population Wellbeing," Societies, MDPI, vol. 8(2), pages 1-19, June.
    10. Kovács, Olivér, 2017. "Az ipar 4.0 komplexitása - II [The Complexity of Industry 4.0 - Part 2]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 970-987.

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    More about this item

    Keywords

    Flexicurity; Unemployment; Persistence; J2; J4; J6;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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