Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Flexibility, security, flat hierarchical structures, and a team-oriented approach are some of the keywords that characterize the Danish labor market. Broadly speaking, the so-called Danish model or flexicurity model combines high mobility between jobs with social security and active labor market policies. This entails that employers can easily hire and fire, but employees have a safety net between jobs. For instance, some employees in Denmark have a notice period of only five to six days. In addition to this, the model ensures that employment and salary matters are regulated through collective agreements. Central welfare topics such as the right to maternity leave, pension, and compensation in case of dismissals are some of the topics which are handled through such agreements.
Denmark's employment rate has increased over recent years and in 2022, the country had one of the highest employment rates in Europe. In a similar fashion, the number of employed people in Denmark increased over the past decade and was expected to reach nearly three million during 2023. However, there are differences between the genders, and young people have lower employment rates than middle-aged. Looking back at the past 10 years, the number of unemployed people declined significantly except for 2020, when COVID-19 hit the economy.
Denmark's employment rate has increased over recent years and in 2022, the country had one of the highest employment rates in Europe. In a similar fashion, the number of employed people in Denmark increased over the past decade and was expected to reach nearly three million during 2023. However, there are differences between the genders, and young people have lower employment rates than middle-aged. Looking back at the past 10 years, the number of unemployed people declined significantly except for 2020, when COVID-19 hit the economy.
Salaries and work-life balance
As in the other Nordic countries, work-life balance plays a significant role in the Danish society. Hence, a work week of 37 hours is the most common for Danish employees. Although the average weekly working hours come close to 37 hours, there are some notable exceptions. Men generally work longer hours than women, and employees in the private sector also work more. Differences based on gender and sector also become clear considering salaries, and the gender pay gap is still a topic in Denmark. In 2021, men earned a higher salary than women – both in the public and private sector.The impact of COVID-19
Due to the outbreak of the coronavirus (COVID-19), however, employment figures dropped significantly during spring 2020 and onwards. While over 2.8 million people were employed in February 2020, the number reached the lowest point in May 2020, before increasing again slightly in June 2020. Since February 2021, the number of employees in Denmark has increased continuously. A natural consequence of a decreasing number of employees is a growing unemployment rate. In the first quarter of 2020, the unemployment rate stood at five percent, which was considerably higher than usual. However, it fell rapidly through 2021. As a consequence of the increasing unemployment rate due to the pandemic, the number of recipients of unemployment benefits in the country increased by 30,000 in 2020.
