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Flexicurity: the Danish Model

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  1. Introduction.
  2. Flexibility on the labour market.
    1. Collective agreements vs passing legislation.
    2. Active employment policy.
  3. Social protection via the Welfare state.
    1. Heritage of the social system making process through the 20th century.
    2. Social cover financed by a tax system.
    3. The limits of the flexicurity model.
  4. Conclusion.
  5. List of literature.

The word "flexicurity" is used to describe a social system combining an easy possibility for the employers of hiring and firing - flexibility - to important social benefits for unemployed people - security. This model is typical for Denmark for different reasons. Welfare benefits are centralised under the state authority represented by one minister that has in charge the employment issue and the social assistance. Moreover, in the Labour market regulation, the state intervenes rarely with legislation. Most of the rules are the product of a consensus between employers and powerful trade unions. The "flexicurity" model consists in on one hand, the free possibility for employers to hire and fire people, following the economic trend, which depends more and more on the international fluctuations, on opportunities offered by new technologies On the other hand, the state has in charge the unemployed people and provides good conditions to maintain their standard of living but also to incite them to find a new job through training, education, job offers This concept of "flexicurity" put together three notions that are not used to be coordinated: the Labour legislation, the unemployment benefits system and the employment policy. The objective is to protect people more than jobs. Indeed, the necessity was, after the crisis of the 1970s, to develop new mechanisms of security and social protection that are adapted to new requirements and that permit the society to take advantage of technical progresses and globalisation trend.

[...] The relations between the state and these Labour organisations are based on a voluntary bargaining system that provides a large professional autonomy[4], for instance a freer incentive for employers to hire without having too heavy charges and strict rules on layoff. The social partners are recognised though the right of association in the constitution. Indeed, both trade-unions and employers recognise each other. That helps to solve the problems on the Labour market by reaching collective agreements. During the period of negotiation, as well as during the period when the agreement applies, there is a peace ?obligation?. [...]

[...] The Danish model could also be developed on new incentives, restricted resources and human resources, new opportunities of employment and services to fulfill the new needs of today's society. b. Social cover financed by a tax system The paradox is that Denmark is a country with very heavy taxes and still it is more competitive and has a higher employment rate that many other countries in Europe. Indeed, in this concept, mass unemployment is seen as a threat for public finances and more generally for the welfare state especially on the social and political aspects of the model. [...]

[...] The ?flexicurity? was designed to combine all the advantages of the Danish system to adapt it to the new conditions in the Labour sector after the changes and difficulties of the 1980. The responsibility to solve problems that exist in the Danish Labour market in the beginning of 1990 should not come only from the government. Wages and working conditions used to be fixed by collective agreements. So in the same mind, it requires the active cooperation of the trade-unions and employers. [...]

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