Making Labour Market Policy More Flexible While Preserving Accountability

Employment Region Copenhagen & Zealand The Danish National Labour Market Authority

Venice, 18 April 2008

Jan Hendeliowitz LEED Vice-chair, OECD-LEED Committee Director of Employment Region Copenhagen & Zealand The Danish National Labour Market Authority Denmark

080418-Venedig Employment Region Copenhagen & Zealand The Danish National Labour Market Authority Facts about Denmark

• Total population 5.4 million • Work force 2.9 million • Employed people 2.8 million • Employment rate 76.8 % • Unemployment rate 2.1 % • Youth unemployment 1.9 % source: www.jobindsats.dk (Statistics Denmark)

080418-Venedig Employment Region Copenhagen & Zealand The Danish National Unemployment rates in Denmark, EU and OECD Labour Market Authority 1991-2007

12,0

10,0

8,0

6,0 Procent

4,0

2,0

0,0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Denmark EU OECD

Source: OECD 080418-Venedig Employment Region Copenhagen & Zealand The Danish National Labour Market Authority The Danish Flexicurity Model

Limited degree of employment protection and high job mobility - 800,000 or circa 30 % of all Danish wage earners change their jobs each year - 20% of the work force experiences unemployment each year

The main axis of the flexicurity Flexible model labour market The qualification effect of the LMP

Generous Active welfare LMP schemes

Motivational Activation is both a right and an obligation effects of LMP High compensation rates - In Denmark 1.7 % of GDP is spent on active measures and 2.5 % on passive measures - 3000 USD a month before tax 080418-Venedig Employment Region Copenhagen & Zealand The Danish National The main elements of the Labour Market Authority flexicurity model

• A flexible labour market with low employment protection and high job mobility • A generous welfare system with high income security • An active labour market policy • Collective agreements between the parties in the labour market • Dynamic legislative process – regular review and revision

080418-Venedig Employment Region Copenhagen & Zealand The Danish National The political and institutional Labour Market Authority set-up of the Employment Service

Minister for Employment The National National level Sets the focus areas and objectives of the employment effort Employment Council

National Labour Market Authority

Contract Regional operational units 4 Employment Regions Responsible for supervision of the labour market etc. 4 regional Supervision of effects and outcomes etc., including employment follow-up of the Minister's objectives Regional level councils

Approves the States part of the performance audit and the employment Supervision and follow-up of plan the effects and outcomes of the job centres’ total employment effort

77 job centres 14 pilot job centres

State service 91 local employment councils Local level Municipal service Municipal service

The municipal councils approve the performance audit and the employment plan for their own job centres. In each job centre the state and the municipality share the responsibility for the employment effort. In the pilot job centres the municipal council alone approves the performance audit and the employment plan. 080418-Venedig Employment Region Copenhagen & Zealand The Danish National The planning and monitoring process Labour Market Authority in Job Centres

Analysis of the labour market situation Analysis reports compiled by the Employment plan Employment Regions and the The final employment Regional Employment Councils plan is sent to the Regional Employment National targets Council The Minister announces the national targets and focus areas for next year October - Jan - December March Regional targets The targets are specified in a contract between the Minister, the Employment Juli - April - Regions and the Regional September June Employment Councils

Follow up and supervision Local targets Regular follow-up of The job centres involve the the job centres Local Employment Councils performance by the in the process of setting the employment regions local targets for the coming year

080418-Venedig Employment Region Copenhagen & Zealand The Danish National The national performance targets for 2008 set Labour Market Authority by the Minister of Employment

Performance target 1: • Decrease in the number of unemployed people over 3 months.

Performance target 2: • Focus on people who have been unemployed for more than a year, as well as the targets set under the national initiative known as ”A New Chance For Everyone”. These targets are: 1) 25 per cent will enter employment or training 2) The target group will be self-supporting 15 per cent of the time 3) The target group will be participating in an activation scheme 40 per cent of the time.

Performance target 3: • Decrease in the number of unemployed young people (i.e. those under 30)

080418-Venedig Employment Region Copenhagen & Zealand The Danish National Labour Market Authority Follow-up procedures

• The Employment Regions closely follow up the performance outcomes being pursued in the job centres

• Quarterly analysis reports are compiled by the Employment Regions on the basis of the overall national and regional targets

• The reports contain an assessment of the effects and outcomes achieved by the respective Employment Regions, plus a benchmarking of the individual job centres

• Dialogue meetings concerning outcomes are held with the Job Centres twice a year or more

080418-Venedig Employment Region Copenhagen & Zealand The Danish National Labour Market Authority Example of benchmarking of Job Centres

The proportion of the target group of long-term unemployed on social welfare ”A New Chance for Everyone” that is self-supporting, 3rd quarter of 2007

45,0%

40,0%

35,0%

30,0%

25,0%

20,0%

15,0% 9,7% 10,0%

5,0%

0,0%

Faxe

Sorø

Lejre

Køge

Greve

Herlev Solrød

Egedal

Furesø Stevns

Tårnby

Lolland Allerød

Holbæk

Hillerød

Ballerup Slagelse

Rødovre Glostrup Roskilde Gentofte Lyngby- Halsnæs

Taastrup Brøndby Gladsaxe

Ringsted Gribskov Næstved

Hvidovre

Bornholm Helsingør Hørsholm

Rudersdal

Odsherred

Vallensbæk

København

Albertslund Kalundborg Østdanmark

Fredensborg Vordingborg

Frederiksberg

Frederikssund

Høje Guldborgsund

Source: Effects of employment efforts in the Eastern Denmark Employment Region, 3rd quarter of 2007 080418-Venedig Employment Region Copenhagen & Zealand The Danish National Labour Market Authority Example of benchmarking of Job Centres

The development in the number of unemployed young people in the period September 2006 – September 2007

20,0%

10,0%

0,0%

-10,0%

-16,6% -20,0%

-30,0%

-40,0%

Faxe Sorø

Lejre

Køge

Greve

Herlev

Solrød Egedal

Stevns

Furesø

Allerød

Tårnby Lolland

Holbæk

Hillerød

Slagelse Ballerup

Halsnæs

Brøndby Roskilde Rødovre

Næstved Gentofte Ringsted Glostrup

Gladsaxe Hvidovre

Gribskov

Helsingør

Bornholm Hørsholm

Rudersdal

Odsherred

Vallensbæk København

Albertslund

Kalundborg

Østdanmark

Vordingborg Fredensborg

Lyng.-Taarb.

Frederiksberg

Høje-Taastrup Guldborgsund Frederikssund

The Job Centres • Have a high degree of freedom in planning and implementing their employment initiatives and activities • Are obliged to focus on outcomes, and to achieve results which contribute to the realization of the national and regional outcome performance

The Employment Regions • Are responsible for ensuring coherence between the local initiatives and the National Employment Policies • Follow up the performance outcomes of the employment measures being pursued in the job centres

The Minister of Employment • Sets the national targets and focus areas

080418-Venedig