Danish labour market policy - YouthRiga May 2014, Senior Adviser Leif Christian Hansen, The Danish Agency for Labour Market and Recruitment, www.star.dk, www.bm.dk, leiflha44@gmail.com

Agenda and contents

Key figures Flexicurity PES organisation and institutional set up Employability scheme and tools Youth challenges and targets Youth measures Effects and results Good practices and measures Conclusions

Key figures 2013-2014

Population: 5,6 mill (16-66: 3,8 mill), Labour force: 2,9 mill, Employment rate: 76% (Female 72%), (55-64 years 62%).

Unemployment March 2014: 1) (EU/OECD survey), 6,5% (EU 10,6%), Youth: 11,8% (EU 23,7%) 2) Long term unemployment: 1,7%, EU 5,1%, 3) NEET 15-24 years: 6,6%, EU 13,2%, (Not in Employment, Education or Training)

Registered at the Job Centres: 5,1% (135,800 Persons), Male 4,9%, Female 5,3%, 15-24 years 3,5%, 25-29 8,0%, 50-59 4,9%, 60- 3,6%

Unionization rate: app. 70 % Collective agreement coverage: 70-75 % Further adult training and education 31,6 %, EU 9,2 %, GNP: 2009 – 4.9%, 2012 -0.4, 2013 +0,2%, 2014 +1,6% Lab. budget 2014: app. 4% of GNP (2,3% active, 1,7% passive)

Employment and Unemployment

Employment rates: total, females, older (55-64): EU: 68% 63% 50% Latvia: 70% 68% 55% Hungary: 63% 57% 39% Denmark: 76% 72% 62%

Unempl. rates: total, females, youth, NEET, older: EU: 11,8% 12,0% 23,7% 13% n.a. Latvia: 11,6% 11,0% 23,9% 15% n.a. Hungary: 7,9% 8,3% 24,1% 15% n.a. Denmark: 6,5% 7,0% 12,6% 6,6% n.a.

NEET 15-24 years 2012

The Danish flexicurity triangle(flexibility + security)

Flexible labour market

Unem-ployment benefits Active

LMP

 

Low employment protection:

Easy to hire and fire (external flexibility)

High job mobility (23% turnover)

800.000 job openings (1 mill. before the crisis)

425.000 unemployment spells

Income security Unemployment benefits, 2 years duration incl. activation (earlier 4 years) high compensation for low-wage groups (90%), average replacement rate app. 60-65% (For non-insured Social security benefits)

Employment security: active labour market policy, activation,

right and duty, individual job plan

Unemployment and education benefits

Unemployment insurance - Voluntary (app. 77 % of the labour force), 18-63 years Benefits 90 per cent of former income, maximum 815 DKK per day (109 Euro) – 5 days per week Time-limited inclusive activation, 2 years (earlier 4 years) Administered by State-approved, private unemployment funds Financing: 1) members contributions app. 520 Euro per year regardless of income and of unemployment level and

individual risk 2) plus general taxes Early retirement pay from 60/62 years to 65 (optional) (Acute Packages due to the reduction from 4 to 2 years: Temporary lab.mark. benefit until 2016)Social cash benefit Family-based and means-tested (app. 80% of unempl. benefits), Not time-limited Administered by local municipalities (reimbursement from the state) Financing: general taxes

State educational grant and loan schemes (SU) Students are entitled to public support for further education - regardless of social standing. 2 main programmes: One for people over 18 year following a youth education program, and one for students enrolled in a higher education course. General taxes.

Education benefit ( (the cash benefit reform) Below 30 years old without education, The rate corresponds to the state educational grant, which is lower than cash benefit. Recipients with challenges can receive a higher rate after three months, General taxes.

8

Minister for Employment

Danish Agency for Labour

Market and Recruitment

Regional

Employment

Councils

94 Integrated job centres for all job-seekers (insured and uninsured and people on sick leave)

Local

Employment

Councils

National

Employment

Council

98 municipalities

4 Employment regions

Full responsibility of the municipality, State subsidiesExternal service

providers

27 unemploymentInsurance funds

98 Social

Welfare offices

- Cash benefits

The Danish institutional setup (changes can be expected)

Government

Municipalities

Education,

Training,

Guidance

53 Youth

Guidance

Centres

An overview

The Minister for Employment goal: People from public benefit into employment – young people into education, (Long term target: to increase the work force)

4 Annual targets for the Job Centres 2014: 1)Young people to start on an education 2) Reduce the number of People on Disability Pension 3)Reduce the number of Long Term Unemployed 4)Cooperation with companies

The Agency for Labour Market and Recruitment implementing and following up, 4 tools: 1) Legislation for jobseekers and job centres, 2) Economic incentives to the Municipalities 3) IT-systems Benchmarking (Jobindsats.dk) 4) Dialogue, (5. The Labour Market Balance)

4 Employment regions monitor, advice, help and assistance to the job centresThe 98 municipalities manage the Job Centres, responsible for the contact with the

unemployed and with people on sick leave and with the EnterprisesPerformance Management: The Knowledge Bank (Jobeffekter.dk) and

Benchmarking (Jobindsats.dk)Adult Vocational Training and Education: The Ministry of Education

Employability efforts (Activation)(changes can be expected)

Focus on direct ways into employment, job search and job placement activities (self help) – and sanctions. Regular contact with the unemployed:

Day-one registration (65 % on-line) and CV Job bank and CV bank – www.jobnet.dk Employability profiling (target groups/match groups) At least every 3 months personal contact Weekly online reporting to and from the job centre (job options) After 9 months: job plan and activation, below 30 years after 3 months,

below 19 years after 2 weeks, above 60 years after 6 months:

3 groups of activation schemes for all unemployed, focus on the labour market: Guidance and upgrading of skills and qualifications: 60 % Practical work training in enterprises: 25 % Wage subsidies (private and public sector): 15 %

The Danish match model

Data on youth in DK, 15-29 years

Educational level of unemployed:

App. 50,000 Young people below 30 years on social benefits: 9 out of 10 without educationApp. 35.000 Young people below 30 on unemployment insurance benefits 3 out of 10 without education

Characteristics of unemployed:

15-17 years: Typical drop outs from primary school, vulnerable groups18-19 years: unskilled, not started on or dropped out from upper

secondary education (High School/Gymnasium) or from Vocational education and training (VET), ordinary young people or vulnerable groups

20-29 years: all kinds of young people: unskilled, skilled, graduated, drop-outs, vulnerable, ordinary etc.

Youth Challenges and targets: From public benefit into education and employment, early intervention and activation

1. The overall objective for the youth schemes (15-29 years) is to: get young people without an education into education get young people with an education into employment give young people the needed upgrading to obtain an ordinary education. 2. Educational target: 95% of a youth cohort is to complete a youth education by 2015, 65% a

longer education, hereof 25% a university degree3. Employment target: The job centres must ensure a reduction in the number of young unemployed

under the age of 30 in relation to the preceding year All unemployed below the age of 30 without an education have a duty to

begin an education and will get assistance Youth guarantee after three months (-29 years): Right and duty to Job

search, Counselling, Education, training and activation (EU Youth guarantee scheme after 4 months, -24 years.)

Reduce the number of People on Disability Pension/anticipatory pension, no people on DP without testing alternatives (ordinary jobs, flexi-jobs etc.) via Rehabilitation programme and rehabilitation teams (testing and training etc.)

For people below 40 years DP is the ultimate last resort

The Danish education system: an overview

Educational Challenges

Too low performance in compulsory education/schools (OECD Pisa tests) – low ability in reading and maths

Upper secondary school (high school/gymnasium) vs. Vocational education (VET) – 70 % of a cohort attend the gym, means lack of qualified young people on Vocational education. Ih the future risk for shortage and bottlenecks of vocational educated people.

Low performance and drop outs – at all levels, particularly on Vocational education

Shortage of practiceships in VET. Too many years to complete a higher education

(University studies) – high age af newly graduated compared to other countries

The New Social Security Benefit ReformEarly intervention, education and activation

Focus on educating young people Duty to work for the social security benefits (utility effort) Better assistance to people to get closer to a job or an

education, e.g. holistic effort with complex issues and mentor All young people below the age of 30 without an education have

a duty to begin an education and will get assistance Assistance particularly for the education of lonely 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 Strengthened coordination between municipalities (job centres)

and educational centres

Education and employment efforts

Measures for all 15-17 years (Youth Guidance Centre and Job Centre)

15-17-year olds must be in education, employment or other agreed activity in accordance with their personal education plan. The activities shall aim at that the 15-17-year old sooner or later completes vocational or upper secondary education or gain foothold at the labour market. First interview within 7 days.

Assessment of 15-17-year olds readiness for education Leaving primary and lower secondary education to start at a vocational or upper secondary education, the Youth Guidance Centre must assess whether the young person possesses the necessary educational, personal and social skills. For young people assessed not yet ready, the municipality must provide training or whatever needed to qualify for a positive assessment.

The municipalities must offer young people not ready for education special courses aiming at uncovering the interests and competencies of the young person and prepare him/her for education.

Measures for 18-29 years (I)

Legislation rules - job interviews: Age 18-29: entitled to a job interview within one month and

thereafter at least every three months

Legislation rules - activation measures Age 18-19: entitled to activation within one month for min. 6

months Age 20-29: entitled to activation within 3 months for min. 6 months If still unemployed, the job centre initiates a new activation

The Active Labour Market Policy instruments: Vocational guidance and skills upgrading Practical work-based training in enterprises Wage subsidy jobs

Measures for 18-29 year (II)

Young people without an education - Complete vocational or further education.

The cash benefit reform: Early intervention and activation Initiative ‘Building Bridge to Education’ Reform of vocational education and training (VET) The Retention Taskforce Internship Centres Youth Guidance Centres

Young people with an education - Ease their transition into employment. Trainee efforts for graduates Wage subsidy jobs Enterprise training Jobrotation Upgrading in connection with a job Usefulness job (nyttejob) Job Centres

Young people without the preconditions to begin and complete ordinary education - upgrading of skills to be able to obtain an ordinary educa-tion.

Better transitions to, and retention in VET We Need All Youngsters (Ethnic minorities) Youth Guidance Centres

PES services to all young people

Tests in reading/writing and maths, and if needed courses

Mentoring services, to get in contact with local education supervisors, ensure the young get up in the morning etc. the young person can keep their mentor during education.

Additional resources for increasing co-operation between youth guidance centres, educational institutions and the job centres, e.g. Youth units

Early intervention and measures for newly graduated people from universities etc.

Assistance to young people to obtain an after-school job/leisure time job

Integration and better use of data from different administrative systems in order to assist and identify young people not in employment or training.

Visiting schools and informing pupils on the labour market

Local campaigns to prevent young people from becoming social benefit receivers when they turn 18 and instead take an education

Local projects financed by various funds, e.g. mental health – Try new ways

Special task force unit to assist the job centres 2009-2012

Strategy for building up evidence

Collecting

existing

evidence

Disseminate

evidence

Developing

new

evidence

Research

reviews

Building

a Bank

of evidence

Projects

Randomized

controlled

trialsSamspil.info

Dialouge

www.ams.dk

Jobindsats.dk

A systematic approach

WHY: Build policymaking on evidence

Spent money wisely

We know that ALMP works. But what part of it works?

17 out of 19 Danish and International studies find positive effects of private wage subsidy jobs in general.

Our randomized social experiments as well as 35 out of 40 reviews show positive effects from job counseling.

Still need for more knowledge about effective policies (especially for weaker groups of unemployed).

For unemployed with lower labour market attachment we have evidence that wage subsidy job private and public have positive effects

Evidence on successful AMLP: Intensive and individualized follow-up and contact/dialogue Demand-led training and education Wage subsidized jobs in private enterprises Employment and training activities in real enterprises combined with

mentoring support for hard to place young people

Source: The AMS Knowledge Bank, Jobindsats.dk

Some specific measures

Job rotation scheme: Ordinary staff (private and public) attend training and are replaced by unemployed on activation with wage subsidy up to 12 months

Flexi jobs: People with permanent reduced working capacity. Short time work, full wage, wage subsidy to the private or public employer

Senior jobs in the municipalities: A right for people over 55 years loosing entitlement to unemployment benefit. Until the age of early retirement (60 years). Ordinary wage. State subsidy.

Employability Partnerships: To introduce young people to job and education - involves Youth Guidance Centres, Educational Institutions, Job Centres and Business

Business Centres: Local enterprises and the job centre assist and help vulnerable group to be integrated in a concrete enterprise, Generation 1: disadvantaged and vulnerable people on social benefits, Generation 2 Long term social benefit recipients and people in a ressource program (ability testing)

Production schools: Alternative entrance to VET offering individual courses based on practical work and production to young people without immediate qualifications to enter secondary education.

Well performing youth employment countries – common characteristics

Flexible labour markets

Dual vocational educational systems (vocational schools and practice ships in enterprises

Germany 7,8% Switzerland 8,5%Austria 9,5% Denmark 12,6%

Close contact and interaction between universities/vocational educational schools and business/enterprises

Student work experience

Active and individualized locally focused labour

Market measures reaching all young unemployed

History of modern Employment policy ”Enlarging the workforce”

1975-: extension of unemployment benefit period, early retirement pay, activation 1994: Right and duty activation, regionalisation and decentralisation, job rotation

scheme, leave schemes. (2000 Flexicurity - Denmark and The Netherlands) 2002: ”More people at Work”: e.g. external service providers 2006: The Welfare Agreement e.g. later retirement, senior job 2008: Increase the labour force (Danish and international recruitment) plus The

Labour Market Commission (later retirement) - 2009: labour supply (tax reform), crisis packages (e.g. financial sector, labour market measures), the new job centres (municipalities) - 2010: The Fiscal Consolidation Agreement e.g. reduced unemployment benefit period, - 2011: reduction of the early retirement scheme

2011: new government, kick start and some new ALMP initiatives 2012-13: Acute Package for LTU, Youth Packages, Reform on flexi-jobs and disability

pension, Reform on State Education Fund, reform on social cash benefits, Competitive Power Package

Expert Committee on ALMP spring 2014 (Carsten Koch Committee). Content and organisation of the employment policy.To be discussed in the Parliament

9. februar.

Conclusions

Relative low youth unemployment - Due to the dual VET-system, to the intensive and comprehensive employability system and to flexicurity

Very long tradition for tripartite cooperation in Denmark – also in VET and in employability programmes

Shortcomings and lacks in the educational system, Gymnasium versus VET

VET upgrading to come Current political discussion in Parliament on the content

and organisation of the employment policy Get young people without an education into education Get young people with an education into employment Give young people the needed upgrading to obtain an

ordinary education.

Thank you very much for your attention. It has been a privilege to be here