The Danish Model. Reforms and Flexicurity. Hanne Jørgensen Manager Jobcenter Gentofte

Transcription

1 The Danish Model Reforms and Flexicurity Hanne Jørgensen Manager Jobcenter Gentofte

2 Population 5.6 million 16-66: 3.8 million Labour force: 2.9 million Employed: 2,792,000 Key figures on national level Unemployment October 2014: Total registered at job centres 133,100 = 5.0 % incl. people in activation 27,600

3 The Danish Model Pay and working conditions in the labour market are negotiated between the social partners institutional since 1899 Cover the whole labour market, all sectors, all job-types, all groups Based on understanding of mutual interests, trust and dialogue The social partners are represented in all governmental bodies, where labour market, educational and welfare issues are negotiated Consensus rather than conflict Dynamic legislative process regular review and revision

4 Flexicurity Flexible labour market Low employment protection: Easy to hire and fire (external flexibility) High job mobility (23% turnover) Rapid structural change: 540,000 job openings (used to be ) 425,000 unemployment spells Unemployment benefits Active LMP Income security Unemployment benefits, 2 years duration incl. activation (earlier 4 years), high compensation for lowwage groups (90%), average replacement rate app % (cash benefits) Employment security: active labour market policy, activation, right and duty, individual job plan

5 The institutional setup from January unemployment insurance funds Government 98 Municipalities Ministry of Employment Danish Agency for Labour Market and Recruitment - 3 decentralised labour market offices National Employment Council 8 Regional Employment Councils Youth Guidance Centres External service providers 98 social welfare offices 94 integrated job centres for all job seekers (insured and uninsured) Full responsibility of the municipality

6 Ministerial targets for the employment initiatives in the municipalities in 2015 Overall goal: People from public benefit into employment young people into education Four targets Young people without education receiving public benefits have to start an education Reduce the number of people with social, mental or physical difficulties who have received benefits for a long time Reduce long term unemployment Enhance cooperation with companies

7 The act on Active Employment initiatives 1 The aim of the employment regulations are: 1. To support jobseekers to gain a job 2. To provide service to private and public enterprises regarding recruitment and support recipients of sickness benefits in maintaining contact to the labour market 3. To support recipients of daily benefits and unemployment benefits into employment as fast and effectively as possible so they can support themselves and their families 4. To support people who have a limited ability to work and therefore need special help to obtain and perform a job.

8 Recent reforms on the Labour Market Implementation of reforms: Reform on flexi-jobs and disability pension January 2013 Reform on State Education Fund January 2014 Reform on Cash benefits January 2014 Reform on Sickness benefits Juli 2014 Reform on The Employment Policy January 2015 Reform on International Recruitment January 2015 Reform on Vocational Education Juli 2015

9 Why all these reforms? 730,000 people on public benefits Jobready Not jobready/ready for active maeasure /sickness benefit Permanent benefit recipients Early retirement allowance 0

10 Aim of the reforms Challenges: Growing elderly population Growing public spendings to support the welfare system Decrease in the numbers of qualified people in the work force Aim: Reduce public spendings on welfare Increase the fiscal revenue Increase the work force Qualify the unemployed and the young to meet the demands of the enterprises - now and in the future

11 Reform on flexi-jobs and disability pension Implementation from January 2013 No citizens on disability pension, if they are under 40, unless they are terminally ill or do not have any work ability at all Change of focus: Rehabilitation, Recovery and Empowerment From focusing on reasons why the individual cannot work to a perception on how the work ability can be developed through a combined social, mental and employmentoriented effort Rehabilitation team: Cross-sectorial team with participation of medical advisor from the Regional Health Care Authority, representives from Social Services, the educational sector and the employment Services ( the local jobcentre). Rehabilitation plan is made in corporation with the Rehabilitation team and the individual Effects: New receivers of disability pension in the latest year ( oct oct ) has fallen 63 % compared with the same period before the reform

12 The Cash Benefit Reform Implementation January 2014 Focus on educating young people youngsters under 30 without an education have to sign a contract when to apply for and start up on an education Duty to work for the cash benefits ( work for the society) Strengthened the assistance to people with difficulties, so they get closer to a job or an education, e.g. holistic effort and mentor Assistance particularly for the education of single parents Activity allowance to young people not ready to begin an education Duty of intensive job search during the first three months Effective sanction system Mutual duty to support each other financially for cohabiting couples over the age of 25 ( will be changed in 2016 ) Strengthened coordination between municipalities, Health Authorities and educational centres Effects: Too early to measure the effects, but a notable rise in young people applying for and starting an education in August 2014

13 The Sick Benefit Reform Implementation July 2014 Reduction of the period receiving sick benefits to 22 weeks. The period can be extended for individuals with severe illness or individuals waiting for medical treatment New benefit-scheme Reduced benefits for individuals with a complex illness, where there are no specific diagnosis or a time perspective for returning to work. It could be persons suffering from depression, stress etc. The individual is obliged to participate in a rehabilitation plan Fast track for enterprises. The jobcentre are obliged to make a plan with the employer and the employee concerning a quick return to work with measures such as part time work for a while, personal assistance or other other requirements needed in the specific situation. Effects: Too early to measure the effects expectations are reduced public spending on sick benefits

14 Reform on The Employment Policy Implementation January 2015 Intensive contact the first 6 months between the unemployed, the jobcentre and the unemployment insurance funds Right and duty to participate in one activity during the period of unemployment, mainly through job training in enterprises Adult apprenticeship for unemployed. Improvement of public subsidies for enterprises signing an educational contract with the unemployed taking an adult apprenticeship Education will target the unemployed, who need it the most and according to the demand of the enterprises Stronger economical incentives for the municipalities involving enterprises in the active labour market policies Increased focus on the collaboration between entrepreneurship, growth, demand and supply of qualified labour force and the employment policy Decrease structural unemployment

15 Lessons learned : The reforms do not prevent people from getting sick, sacked, divorced etc., but: Public spending is reduced because of reduced benefits and reduced periods for receiving benefits The change of concept with focus on active citizenship, empowerment and responsibility for own situation opens for a change in attitude towards alternative ways to get a job, master your life and job even though you suffer from an illness, etc. The key to succes: The enterprises show willingness to create jobs for people, who can not work on equal terms

16 How to follow the effects of the active labour market policy Statistics: Rapport with key figures: or Monthly updates of unemployment rates: Analyses on labour market issues: