Denmark / Flexicurity Adjustment: Max UI benefits period cut to two years from four years

The Danish model of mixing flexibility for employers, who can hire and fire personnel easily, with social security for workers, was credited with virtually eradicating unemployment in the Nordic nation, before the financial crisis hit..

The system differs markedly from those in neighbouring Sweden and Germany, where terminating an employee is often expensive and cumbersome.

If workers who lose their jobs receive generous benefits and are offered courses and training schemes that help them improve their skills, they will be less inclined to demand a high level of job security, the Danish argument goes.

In recent years, flexicurity has garnered attention across Europe, especially in countries beset by high youth unemployment.

Italian lawmakers looked to Denmark earlier this year before passing legislation that would make it easier to fire workers while also making employees eligible for a modernised welfare scheme.

But back in Copenhagen, politicians are trying to tailor flexicurity to a new reality of sluggish growth and rising unemployment in the wake of a property market crash that has shaken the country’s banking system.

With unemployment at 7.7 percent of the workforce in the third quarter, Denmark is scrambling to find jobs for thousands of people whose unemployment benefits are set to expire.

The period when a person is eligible for the country’s famously generous job seekers’ allowance was halved in 2010 — to two years from four years — by the previous centre-right government, rolling back a crucial “security” component of the system.

Choosen excerpts by Job Market Monitor from

via Denmark scrambles to save ‘flexicurity’ as economy stalls – Yahoo! News Singapore.