The Danish model of activation

This paper outlines the main features of the Danish employment system, notable for the fact that it has maintained high rates of employment and low rates of overall unemployment, long-term unemployment and youth unemployment, since the mid 1990s. Labour market policies adopted since 1994 are examined in relation to their specified aim of creating a well-functioning labour market and combating long-term unemployment. Broad parallels are drawn between the main characteristics of the Danish and Australian strategies for addressing youth unemployment, which include in both cases, a shift towards active labour market policies with tighter job seeking requirements and eligibility conditions for receiving benefits and an increased emphasis on vocational education and training. The final section raises implications for Australia, where unemployment levels remain persistently high, despite sustained policy efforts to reverse this trend. Introduction Unemployment, particularly youth unemployment and long-term unemployment, has retained a prominent position on the political agendas of all industrialised nations, regional bodies and multi-lateral agencies during the past three decades. In some regions, namely the European Union, member countries prepare an annual National Action Plan detailing priorities that respond to the four pillars of the European Employment Strategy. One such member country, which has been successful in reducing youth unemployment to 7 per cent and decreasing long-term unemployment by 50 per cent, has been renowned for achieving an “employment miracle” (Madsen 1999: 1). In Denmark, which has the highest rate of employment in the European