Active Labour Market Policy on Integration
of
Pre-retirement unemployed in Denmark
Riga May 2014, Senior Adviser Leif Christian Hansen, The Danish
Agency for Labour Market and Recruitment, www.star.dk,
www.bm.dk, leiflha44@gmail.com
Agenda and contents
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Key figures
Flexicurity
PES organisation and institutional set up
Employability scheme and tools
Pre-retirement before senior age
Senior age pre-retirement
Senior measures
Senior self-activation (Senior Erhverv (Business))
Good practices and measures
Conclusions
Key figures 2013-2014
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Population: 5,6 mill (16-66: 3,8 mill), Labour force: 2,9 mill, Employment
rate: 76% (Female 72%), (55-64 years 62%).
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Unemployment March 2014: 1) (EU/OECD survey), 6,5% (EU 10,6%),
Youth: 11,8% (EU 23,7%) 2) Long term unemployment: 1,7%, EU 5,1%,
3) NEET 15-24 years: 6,6%, EU 13,2%, (Not in Employment, Education or
Training)
Registered at the Job Centres: 5,1% (135,800 Persons), Male 4,9%,
Female 5,3%, 15-24 years 3,5%, 25-29 8,0%, 50-59 4,9%, 60- 3,6%
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Unionization rate: app. 70 %
Collective agreement coverage: 70-75 %
Further adult training and education 31,6 %, EU 9,2 %,
GNP: 2009 – 4.9%, 2012 -0.4, 2013 +0,2%, 2014 +1,6%
Lab. budget 2014: app. 4% of GNP (2,3% active, 1,7% passive)
Employment and Unemployment
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Employment rates: total, females, older (55-64):
EU:
68%
63%
50%
Latvia:
70%
68%
55%
Hungary:
63%
57%
39%
Denmark:
76%
72%
62% (55-59
years: 82%, 60-64 years 44% (60 years Early
Retirement Pay))
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Unempl. rates: total, females, youth, NEET, older:
EU:
11,8% 12,0% 23,7% 13%
n.a.
Latvia:
11,6% 11,0% 23,9% 15%
n.a.
Hungary:
7,9% 8,3% 24,1% 15%
n.a.
Denmark:
6,5% 7,0% 12,6% 6,6% n.a.
The Danish flexicurity triangle
(flexibility + security)
Low employment protection:
Easy to hire and fire (external flexibility)
Flexible
labour
market
Unemployment
benefits
Income security Unemployment benefits, 2 years duration
incl. activation (earlier 4 years) high compensation for lowwage groups (90%), average replacement rate app. 60-65%
(For non-insured Social security benefits)
High job mobility (23% turnover)
800.000 job openings (1 mill. before the
crisis)
425.000 unemployment spells
Active
LMP
Employment security: active
labour market policy, activation,
right and duty, individual job plan
Unemployment benefits in Denmark
Unemployment insurance
 Voluntary (app. 77 % of the labour force), 18-63 years
 Benefits 90 per cent of former income, maximum 815 DKK per day (109 Euro) – 5 days per week
 Time-limited inclusive activation, 2 years (earlier 4 years)
 Administered by State-approved, private unemployment funds
 Financing: 1) members contributions app. 520 Euro per year regardless of income and of
unemployment level and individual risk 2) plus general taxes
 Early retirement pay from 60/62 years to 65 (optional)
 Acute Packages for consequences of reduction from 4 to 2 years in 2010: (Acute jobs, Special
Training Benefit) and from 2014 Temporary Labour Market Benefit until 2016
Social assistance
 Family-based and means-tested (app. 80% of unempl. benefits)
 No tradable assets over 10.000 DKK (app. 1.330 Euro)
 Not time-limited
 Administered by local municipalities (reimbursement from the state)
 Financing: general taxes
The Danish institutional setup (changes
to be expected)
Minister for Employment
27 unemployment
Insurance funds
Education,
Training,
Guidance
53 Youth
Guidance
Centres
External service
providers
Danish Agency for Labour
Market and Recruitment
4 Employment regions
Government
Municipalities
98 Social
Welfare offices
- Cash benefits
National
Employment
Council
94 Integrated job centres for
all job-seekers (insured and
uninsured and people on sick
leave)
Full responsibility of the
municipality,
State subsidies
Regional
Employment
Councils
Local
Employment
Councils
98 municipalities
7
An overview
The Minister for Employment goal: People from public benefit into employment –
young people into education, (Long term target: to increase the work force)
4 Annual targets for the Job Centres 2014: 1)Young people to start on an
education 2) Reduce the number of People on Disability Pension 3)Reduce the number of
Long Term Unemployed 4)Cooperation with companies
The Agency for Labour Market and Recruitment implementing and following up,
4 tools: 1) Legislation for jobseekers and job centres, 2) Economic incentives
to the Municipalities 3) IT-systems Benchmarking (Jobindsats.dk) 4) Dialogue,
(5. The Labour Market Balance)
4 Employment regions monitor, advice, help and assistance to the job centres
The 98 municipalities manage the Job Centres, responsible for the contact with
the unemployed and with people on sick leave and with the Enterprises
Performance Management: The Knowledge Bank (Jobeffekter.dk) and
Benchmarking (Jobindsats.dk)
Adult Vocational Training and Education: The Ministry of Education
Employability efforts (Activation)
(changes to be expected)
Focus on direct ways into employment, job search and job placement activities
(self help) – and sanctions. Regular contact with the unemployed:
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Day-one registration (65 % on-line) and CV
Job bank and CV bank – www.jobnet.dk
Employability profiling (target groups/match groups)
At least every 3 months personal contact
Weekly online reporting to and from the job centre (job options)
After 9 months: job plan and activation, below 30 years after 3 months,
below 19 years after 2 weeks, above 60 years after 6 months:
3 groups of activation schemes for all unemployed, focus on the labour market:
 Guidance and upgrading of skills and qualifications: 60 %
 Practical work training in enterprises: 25 %
 Wage subsidies (private and public sector): 15 %
The Danish match model
Pre-retirement challenges and targets
Pre-retirement before senior age (Disability)
 Reduce the number of People on Disability
Pension/anticipatory pension, no people on DP without
testing alternative options (ordinary jobs, flexi-jobs
etc.) via Rehabilitation Programme and Rehabilitation
Teams (ability testing and training)
 No people below 40 years on DP (unless absolutely no
working ability)
 Flexi-jobs, People with permanent reduced working
capacity. Short time work, full wage, wage subsidy to
the private or public employer
 Social Enterprises
 Disability Pension (incl. possible ”Light duty job
scheme”)
The New Social Security Benefit Reform
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Focus on educating young people
Duty to work for the social security benefits (utility effort)
Better assistance to people to get closer to a job or an
education, e.g. holistic effort with complex issues and mentor
All young people below the age of 30 without an education
have a duty to begin an education and will get assistance
Assistance particularly for the education of lonely parents
Activity allowance to young people not ready to begin an
education
Duty of intensive job search during the first three months
Effective sanction system
Mutual duty to support each other financially for cohabiting
couples over the age of 25
Strengthened coordination between municipalities (job centres)
and educational centres
Initiatives on senior retention
Senior pre-retirement (retention)
 Keep the seniors on the labour market as long as possible, and
if unemployed then early activation
 The Welfare Reform (2006) and The Agreement on Later
Retirement (2011) changed The State Old Age Pension (OAP) –
later entrance, and the voluntary Early Retirement Pay/Pension
(VERP) – later entrance and shorter benefit period
 No age protection legislation
 Collective agreements ”Social Chapters” for all age groups and
potential age, senior and retirement provisions
 Senior jobs in the municipalities: A right for people over 55 years
loosing entitlement to unemployment benefit. Until the age of Early
Retirement Pay (60/62 years). Ordinary wage. State subsidy.
 Seniorpraksis.dk and The Fund for Better Working Environment
and Labour Retention, se below
 Employability and training programmes, se below
 (Senior disability scheme/pension 5 years before old age pension)
Enhance retention in private and
public enterprises
 Seniorprakis.dk Information and advice on good
senior policies at company level, e.g. awards to best
enterprises
 The Fund for Better Working Environment and
Labour retention – for all age groups
 The aim: ”A good and long working life for everybody”
 ”Senior starter kits” for enterprises to help seniors to
stay on the job as long as possible in the best-suitable
way
 ”Prevention self-help kits” for enterprises to prevent
burnout and attrition
Employment and training services to
senior people
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Employability and training programmes – focus not on age but on
the persons employment and training needs
means participation in ordinary further training schemes on equal
terms with other age groups, e.g. VEU (adult education and
continuing training) and AMU (adult vocational training for skilled and
unskilled workers)
The ordinary activation programme: earlier activation for over 60
years but access to concrete programmes on equal terms with other
age groups
Self-activation, e.g. via Senior Erhverv (Senior Business), se
below
Negative side: 25% of managers in the public social sector and 10%
of managers in private industry do not want to hire staff above 60
years.
Self-activation, Senior Erhverv (Senior
Business) (I)
Self-activation, Senior Erhverv (II)
Self-activation, Senior Erhverv (III)
 To find jobs or project tasks to unemployed senior
workers
 Provide enterprises with competent and
experienced staff
 24 independent networks located all over Denmark
– economic support from The Danish Agency for
Labour Market and Recruitment
 1.600 members on average (unemployed over 50
years)
 650 found a job in 2013
Strategy for building up evidence
WHY: Build policymaking on evidence
Spent money wisely
A systematic approach
Collecting
existing
evidence
Research
reviews
Building
a Bank
of evidence
Developing
new
evidence
Projects
Randomized
controlled
trials
Disseminate
evidence
Samspil.info
www.ams.dk
Dialouge
Jobindsats.dk
We know that ALMP works. But
what part of it works?
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17 out of 19 Danish and International studies find positive effects of
private wage subsidy jobs in general.
 Our randomized social experiments as well as 35 out of 40 reviews
show positive effects from job counseling.
 Still need for more knowledge about effective policies (especially
for weaker groups of unemployed).
 For unemployed with lower labour market attachment we have
evidence that wage subsidy job private and public have positive
effects
Evidence on successful AMLP:
 Intensive and individualized follow-up and contact/dialogue
 Demand-led training and education
 Wage subsidized jobs in private enterprises
 Employment and training activities in real enterprises combined with
mentoring support for hard to place young people
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Source: The AMS Knowledge Bank, Jobindsats.dk
Some specific measures
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Job rotation scheme: Ordinary staff (private and public) attend
training and are replaced by unemployed on activation with wage
subsidy up to 12 months
Flexi jobs: People with permanent reduced working capacity. Short
time work, full wage, wage subsidy to the private or public employer
Senior jobs in the municipalities: A right for people over 55 years
loosing entitlement to unemployment benefit. Until the age of early
retirement (60 years). Ordinary wage. State subsidy.
Employability Partnerships: To introduce young people to job and
education - involves Youth Guidance Centres, Educational
Institutions, Job Centres and Business
Business Centres: Local enterprises and the job centre assist and
help vulnerable group to be integrated in a concrete enterprise,
Generation 1: disadvantaged and vulnerable people on social
benefits, Generation 2 Long term social benefit recipients and
people in a ressource program (ability testing)
Production schools: Alternative entrance to VET offering individual
courses based on practical work and production to young people
without immediate qualifications to enter secondary education.
History of modern Employment
policy ”Enlarging the workforce”
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1975-: extension of unemployment benefit period, early retirement pay, activation
1994: Right and duty activation, regionalisation and decentralisation, job rotation
scheme, leave schemes.
(2000 Flexicurity - Denmark and The Netherlands)
2002: ”More people at Work”: e.g. external service providers
2006: The Welfare Agreement e.g. later retirement, senior job
2008: Increase the labour force (Danish and international recruitment) plus The
9. februar.
Labour Market Commission (later retirement)
- 2009: labour supply (tax reform), crisis
packages (e.g. financial sector, labour market measures), the new job centres
(municipalities) - 2010: The Fiscal Consolidation Agreement e.g. reduced
unemployment benefit period, - 2011: reduction of the early retirement scheme
2011: new government, kick start and some new ALMP initiatives
2012-13: Acute Package for LTU, Youth Packages, Reform on flexi-jobs and disability
pension, Reform on State Education Fund, reform on social cash benefits,
Competitive Power Package
Expert Committee on ALMP spring 2014 (Carsten Koch Committee). Content
and organisation of the employment policy.To be discussed in the Parliament
Conclusions
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Increase the labour force
Get vulnerable groups from public benefits into
employment – ordinary jobs or flexi jobs, full time or
part time
Keep the seniors longer time on the labour market via
changes in old age pension and retirement schemes
Incentives for business to keep the senior workers
longer time in the enterprises
Employment and training measures – only few special
senior measures but on equal terms with other age
groups
Senior jobs
Current political discussion in Parliament on the content
and organisation of the employment policy
 Thank you very much for your attention. It
has been a privilege to be here