Denmark's labor market model offers insights for boosting European competitiveness

Denmark ranked third in the 2024 World Competitiveness Ranking, falling behind Singapore. Despite this, Denmark's flexible labor market, known as "flexicurity," allows easy hiring and firing, contributing to a low unemployment rate of 2.9%, compared to the EU average of 5.9%. The flexicurity model combines job flexibility with a strong unemployment welfare system. Workers can receive benefits for up to two years, averaging 57% of previous earnings. This system encourages quick job placement, with only 0.36% of the labor force unemployed for over a year. Denmark also invests in vocational training, with about 2% of the workforce participating annually. The country benefits from stable energy prices, but challenges remain, including bureaucratic hurdles that could impact competitiveness.