Distribution of Responsibility for Social Security and Labour Market Policy: Country Report : 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.