Denmark was selected for the Decent Work Pilot Programme as a case study of the successful and sustained integration of economic and social policies. As a small and open economy, the country has achieved high levels of economic growth and international competitiveness combined with high social and labour standards.
The Programme conducted an in-depth analysis of the policies and institutions that enabled Denmark to successfully integrate into the global economy while maintaining high standards of labour and of social protection.
Flexibility, economic growth, equality, security and broad social participation were all explicit and equally important policy goals. Their combination allowed the national economy to remain open to world markets by strengthening the capacity to adjust rapidly to the changing global situation and cushioning the negative effects of external economic shocks. High social and labour standards are not only an outcome of good economic performance, but an essential basis for growth and competitiveness.
The Denmark study shows that, what are often supposedly incompatible trade-offs between economic and social objectives can be reconciled through an appropriate policy mix. The labour market in Denmark is highly flexible not in spite, but rather because of an effective system of social security. The large income transfers involved in the system, in particular a high level of unemployment benefits, need not act as a disincentive to gainful employment. When combined with an active labour market policy that promotes both rights and obligations of beneficiaries it is an effective way to upgrade and reallocate human resources. In addition to analysing dynamic macro-economic and social policies, the study examines the contribution of vocational education and training, social protection and welfare reform, active labour market policies and programmes to reconcile work and family life.
Social dialogue has played a prominent role in achieving and maintaining decent work over decades. The study also shows that policy coherence is a continuous process and that Denmark faces new policy challenges to maintain its good record.