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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