Today:

25/09/2021

Exploring the world’s best welfare system

Share this article

In 2015, a convincing American economics paper came to a “hard-nosed conclusion that boils down to the fact that cuts in welfare payments led to a jobs boom, says ‘The Economist’. The idea that “lavish welfare benefits discourage work” is commonly accepted. So why munificent?

Denmark has one of the best-functioning labour markets. Danes get more than 80% of previous earnings after six months out of work, Sometimes nearly 100%. Such generosity is the “flip side of its liberal regulation of employment contracts”, which allow employers pretty much to “hire and fire” as they please. Yet the Danes are not “feckless drifters”.

The unemployment rate is below the rich world average; its employment rate is higher. Danes find new jobs faster than almost anyone in the world. In terms of looking for work and improving employability, the requirements for benefits are however onerous.

Denmark spends the most of any OECD country as a percentage of GDP and more than four times the average on policies to make citizens more employable. The lesson learnt? Those huge investments in training, monitoring and enforcement are required so that generous benefits don’t dissuade people from teamwork. “The world’s best welfare system does not come cheap.”

Source: The Economist

Kris Paterson is a writer for WhatJobs.com

Similar Articles

Don't Miss

Navy Will Cut 500 Civilian East Coast Jobs

To fulfil Navy Region Mid-Fiscal Atlantic's Year 2022 budget objective, 500 Navy civilian employees on the East Coast will be laid off, and port activities would be limited to daylight Monday through Friday.

Fed signals bond-buying taper may start soon

As the US central bank's shift away from economic crisis measures gets traction, the Federal Reserve indicated on Wednesday that it will likely begin cutting its monthly bond purchases as soon as November, and that interest rate hikes may come sooner than planned.

Should staff return to the office?

For example, it may persist with current Covid-19 precautions in the workplace, requiring employers to plan for social distancing and to provide extra hygiene facilities. There may also be special arrangements in place for Vulnerable workers, such as pregnant women and those who have been shielding during the crisis