Danish for All? Balancing Flexibility with Security: The Flexicurity Model

Author/Editor:

Jianping Zhou

Publication Date:

February 1, 2007

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The Danish flexicurity model has attracted attention among policymakers in Europe, because it suggests that a flexible labor market can coexist with a generous welfare system to achieve low unemployment. Using a panel of 19 countries over 1960-2002, the paper identifies the elements of the flexicurity model that may have contributed to the low unemployment rate. A theoretical model of dynamic policies is constructed to analyze whether the model can be emulated by other countries. Focusing on the financing aspect, the paper finds that effective implementation will depend on the initial unemployment level and budgetary situation of the country.

Series:

Working Paper No. 2007/036

Subject:

Active labor market policies Labor Labor market flexibility Labor markets Unemployment Unemployment rate

English

Publication Date:

February 1, 2007

ISBN/ISSN:

9781451866001/1018-5941

Stock No:

WPIEA2007036

Pages:

23

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