Danish Flexicurity Model and Policy Risks – article by Daniel Hinšt, who finished Advanced Master of European Studies with a Master thesis on this topic. This article was published in Review 18 of 4Liberty.eu portal – a platform for experts and intellectuals from Central and Eastern Europe. The 4liberty.eu portal is coordinated and managed by the team of Liberté! Foundation from Poland and supported by the German Friedrich Naumann Foundation for Freedom.
Takeaways from the article
Social policy can be seen from a fragmented perspective with a purpose to justify growing costs of welfare and ideological battles against the free market economy. Such policies try to advocate limits of the market economy or even undermine its role, for the sake of making ‘progress’ in changing the economic system. Accordingly, false dilemmas are developed in order to support the ideological battle between social and free market policy.
In particular, the Danish Flexicurity Model represents a golden triangle combining a flexible labor market, high transitional income support for unemployed and training support for market relevant skills. Besides describing those policy features, the article considers risks in the case of applying such policies in Central and Eastern European countries. Understanding preconditions and building blocks that stand behind the Danish Flexicurity Model is necessary when considering its application in other countries with a different cultural mindset and societal context.
Lower levels of social trust, the welfare trap, mobbing at work, excessive public spending on unemployment benefits and training programs, should all be considered as significant policy risks. The Danish Flexicurity Model, if applied correctly, can bring a new light of reconciliation in ideological battles. In a different scenario, copying policies associated with flexicurity, without understanding potential risks and cultural circumstances, represents a risk that flexicurity will not be realized.
Danish Flexicurity Model and Its Golden Triangle
As the Danish Flexicurity Model represents a golden triangle of mutually inclusive policy features, each of them has a purpose that needs to be considered in combination with other features. The model combines a flexible labor market with high levels of security of income and employability. It is an innovative policy concept which creates a compromise between flexible labor market regulations, adequate unemployment benefits, and educational training for the unemployed. Therefore, flexibility satisfies the interests of employers for competitiveness and profitability, while workers and labor unions can be satisfied with generous unemployment benefits and training.
Since companies need to keep their market competitiveness, they need to adapt with production and workforce. Therefore, in some cases, job protections may not be a sufficient option. If workers lose their jobs, they require adequate labor security with regard to income and training to meet market needs. That way, social policy serves the needs of a competitive market economy with high levels of economic freedom.
Read more:
Flexicurity Policies and Europe 2020
