Title:
WP 51 - The distribution of responsibility for social security in Denmark
Abstract:
High levels of unemployment, or high levels of social expenditures as well as the growing demand for a flexible labour force have given new impetus to the world-wide discussion on what model to use for an efficiently operating labour market and in particular on the role of institutions. Although there seems to be a growing consensus on the restricted governmental role in recent decades, this has not been translated into a unanimous appraisal of the role of intermediary organisations, such as trade unions. There is no clear view on an appropriate distribution of responsibility between government, social partners and the market. The research project ‘distribution of responsibility for social security’ aims to create a scientific basis for a clear and consistent view on the role and distribution of responsibilities between the different labour market institutions. As part of this research project, this paper provides an elaborate country study of Denmark.
It is shown that legislation of unemployment insurance and active labour market policy is set by the national government. Legislation with respect to employment protection, however, is largely left to the social partners, i.e. the dismissal of salaried workers is regulated by a special piece of national law, while the rules for blue-collar workers are defined as part of the negotiations between the social partners. The Danish system of unemployment insurance and active labour market policy is a two-tier system: unemployment insurance for members of unemployment insurance funds and social assistance for non-members. The first tier is basically state-run system, while the second tier is administered by the municipalities. As for the performance of the Danish labour market, participation rates are quite high and although unemployment rates are relatively high and differentiated across groups, this is dominated by short-term unemployment.
