LABOUR MARKET REPORT 2013 Employment in Denmark English Summary

Labour Market Report 2013, English Summary © Danish Employers’ Confederation The Confederation of Danish Employers (DA) is the central organisation of 13 employers organisations on the private labour market within industry, commerce, transport, service and construction. The main task of DA is to maintain the interest of the member organisations vis-á-vis the political system, and to coordinate the employers’ mutual interests in the ares of collective agreements. Editor: Karina Ransby Graphic design: DA Forlag Production: DA Forlag Published: 2014, March

Table of contents

Denmark in job crisis 5 The new labour market 13 High job mobility reduces unemployment 25

Page 5

Denmark in job crisis Sweden and Germany have created 2-4 times more jobs than DK

In Denmark, the number of persons in employment has only grown by 3.5 percent since 1996. In our neighbouring countries, Sweden and Germany, the situation is altogether different – there has been created 2-4 times as many new jobs. Denmark is in a job crisis where the upswing in employment from the latest boom, which ended abruptly in 2008, is now completely lost again, see figure 1.

Figure 1

Few new jobs in Denmark 140

The overall employment, index, 1995=100

140 Canada

130

The Netherlands

120

OECD

110 100 90

120 110

Sweden Germany

130

Denmark

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

100 90

SOURCE: OECD. Economic Outlook Database, no. 94. November 2013 - OECD Annual Projections.

Denmark lost 200,000 jobs in the private sector

The number of jobs in the private sector is currently almost 200,000 below the level from 2008. Denmark clearly distinguishes itself as the country where the loss of workplaces since 2008 has been the biggest and most protracted. Germany has been able to maintain the number of employed over the crisis and in Sweden, the drop was quickly turned to progress.

Sweden has improved competitiveness, Denmark has worsened it

During the period, Denmark has had a very different wage development in comparison to Sweden and Germany. Denmark's wage competitiveness has worsened by more than 10 percent since 1995 while, for example, Sweden has been able to improve their competitiveness by 5 percent over the same period. Among other things, this is connected to the Swedish productivity development having been higher than the Danish productivity, see the Danish Ministry of Economic and Interior Affairs (2013).

Page 6 Even though the overall employment has not increased, the Danish labour market is characterised by a large job turnover with many job openings. This helps to create a flexible labour market in which companies and employees with new or other needs and requirements can be matched better. 800,000 job openings annually

Denmark is one of the countries with the highest job mobility in OECD and even though the job mobility was higher in 2008 just before the crisis, there still continues to be around 800,000 job openings annually, see figure 2.

Figure 2

800,000 new job openings every year Job openings, 18-year olds and above, 1,000 persons Change from unemployment, education, etc. to job Change between jobs 1.000

1.000

800

800

600

600

400

400

200

200

0

2008

2009

2010

2011

2012

0

NOTE: The figure for 2008 is based on figures for 2nd to fourth quarter, annualised. SOURCE: Own calculations on Statistics Denmark's Employment for Employees and Population Register.

Larger proportion of job openings are filled by unemployed persons in the private sector

Many job openings get occupied by unemployed persons and newly qualified persons. This is more common in the private sector than in the public sector. In the private sector, four out of ten job openings are filled by unemployed people, while the corresponding figure in the public sector is three out of ten job openings. Prior to the crisis, many extra jobs were created in Denmark, but the picture now is another. Therefore, there are fewer employed persons to pay the bill for the large group of 15-64-year olds who do not have jobs and who live on social support.

Page 7 In 2012, there were 3.3 employed persons per person on social support in the age group 15-64 years while the figure was close to four in 2008. In the previous years, the number was around three employed persons per person on social support, while measured in relation to the private sector employment, the figure is down to around two employed persons per person on social support. In a number of other countries, to which Denmark typically compares itself, there are a larger number of employed persons per person on social support. For example, in Sweden there are 5½ employed persons for each person on social support in the 15-64 year age group - as an average for 2008 and 2011, see figure 3.

Figure 3

Few employed persons per person on social support in Denmark

7

Employed per 15-64-year old on social support Average of the years 2008 and 2011

7

6

6

5

5

4

4

3

3

2

2

1

1

0

Denmark

Germany

United Kingdom

Sweden

The Netherlands

0

NOTE: Employment includes persons on leave. SOURCE: OECD: National reported numbers for employment and The Confederation of Danish Employers (DA) (2013a).

¼ million from social support to employment in order to resemble Sweden

If Denmark were to have the same number of employed persons per person on social support like in the Netherlands or Sweden, this would require reforms that would get almost 250,000 people currently on social support into employment in the private sector.

Page 8

Danish growth crisis Danish growth in GDP third-lowest in OECD in the past 15 years

The mediocre Danish employment development is connected to growth essentially being at the bottom of OECD for many years. Over the past fifteen years, Danish GDP growth has been the third-lowest among the OECD countries. Only Italy and Japan have had lower growth rates, see figure 4.

Figure 4

DK: Third lowest growth in OECD since 1998 GDP per inhabitant, avg. annual actual growth 1998-2012, percent 5

4

4

3

3

2

2

1

1

0

0

Italy Japan Denmark Portugal France Greece Norway Switzerland Belgium Spain The Netherlands USA Mexico United Kingdom Germany Iceland New Zealand Canada Austria Australia Israel Finland Luxembourg Sweden Hungary Slovenia Ireland Turkey Czech Republic Chile Korea Slovakia Poland Estonia

5

NOTE:

The picture is the same if looke at 1995-2012 or 2000-2012. GDP per inhabitant is in national currency and measured at constant prices. SOURCE: OECD.

Several conditions are the reason for the poor development. During the period, Denmark has experienced a worsening of competitiveness, only few reforms have been implemented that have expanded the labour supply and Denmark has had a poor productivity rate. When seen over a 10-15-year period, Denmark is lagging behind in comparison to other OECD countries, see Productivity Commission (2012). Growth in Sweden has been three times that of Denmark

The growth in GDP per Swede has been three times higher than per Dane. German growth has been double that of Denmark. If Denmark would have had the same growth as in Sweden, all Danes would have been significantly wealthier today than is the case. Swedish growth since 1998 would have meant that today, every Dane would have had DKK 70,000 more on average to spend.

Page 9 Fifth lowest growth in OECD up towards 2030

The prospects for the coming decades are not bright either. This is despite the fact that the growth in the wake of the crisis will probably be higher than it has been in the last fifteen years. OECD estimates that in the period up to 2030, Denmark will have, on average, the fifth lowest growth among the OECD countries, see figure 5.

Figure 5

DK: Fifth lowest growth in OECD up to 2030 4

GDP per inhabitant, avg. annual actual growth 2013-2030, percent

4 3

2

2

1

1

0

0

Iceland Germany Canada Japan Denmark Italy USA Belgium Israel Switzerland Austria New Zealand Luxembourg Finland Norway Netherlands France United Kingdom Portugal Sweden Australia Ireland Slovenia Spain Poland Slovakia Mexico Czech Republic Greece Hungary Chile Estonia Korea Turkey

3

NOTE:

The growth rates are based on GDP per inhabitant, constant prices, US-dollar in purchasing power parity. SOURCE: OECD (Economic Outlook 93).

The forecast implies that the difference between Danish and Swedish wealth will become even more profound. Consequently, Danes' consumption possibilities will be more limited compared to our Swedish neighbours. Denmark shoots down the wealth ladder, Sweden shoots up

In the period up to 2030, Denmark will move from being the tenth richest country in OECD measured as GDP per inhabitant to twelth position. Sweden will move from ninth to seventh position. A change in this predicted development can be achieved in various ways - through a larger labour force, longer working hours, increased productivity or improved terms of trade. If Denmark is to have the same GDP per inhabitant in 2030 as Sweden via a larger labour force, this requires the participation of 350,000 extra persons on the labour market, see figure 6.

Page 10 Figure 6

Requirements to labour force if DK is to increase wealth

350

Requirements to labour force in 1,000 persons, if GDP per Dane is to reach the same level as:

350

300

300

250

250

200

200

150

150

100

100

50 0

50 Wealth as in Sweden in 2030

10th position in OECD

0

NOTE:

In this example wealth improvements are solely based on increased labour supply. Wealth can also be improved via increased productitivity or an improvement in terms of trade. SOURCE: Special calculations from DREAM (2013g), OECD (Economic Outlook 93) and own calculations.

A continued position among the ten richest OECD countries requires 135,000 extra persons in the labour force. Budget deficit threatens ahead Downward slide for the public balance exceeds the national budget act

In the coming years there is the prospect of slightly higher growth and consequently, the budget deficits in the public sector will also improve up to 2020. But shortly afterwards, a downward slide will begin for the public finances. From 2026 and onwards, the deficit in the public sector will be so large that it will no longer fulfil the government's national budget act, which implies that the annual structural deficit on public finances may not exceed 0.5 percent of GDP, see figure 7.

Page 11 Figure 7

Large annual deficit ahead 0,5

Public balance, percent of GDP

0,5

-0,5

-0,5

-1,5

-1,5

-2,5

-2,5

-3,5

-3,5

-4,5

-4,5

2012 2017 2022 2027 2032 2037 2042 2047 2052 2057

NOTE:

The structural balance is the difference between revenues to the public sector and expenses in the public sector, including net interest expenses. The deficit on the structural balance will slowly improve after 2060. SOURCE: Special run from DREAM (2013c).

Longer working hours has greatest effect on GDP

Higher employment and longer working hours will increase the revenues for the public sector and reduce the expenses. The effect on the national economy depends on where the increased employment comes from. If the employment rises by 10,000 more full-time persons due to an increase in working hours among employed, the GDP increases by 0.4 percent or DKK 7½ billion in the long term. The effect is half if the employment comes from fewer people on cash benefits instead. This is due to an expected lower productivity among persons on public support compared to people already employed, see table 1.

Page 12

Table 1

Effect of different solution models Long-term effect, 2030, percent

GDP per Dane

Private spending

Debt in percent of GDP

10,000 more full-time employees as a result of: Fewer unemployment benefit recipients

0.3

0.3

-0.2

Fewer cash benefit recipients

0.2

0.3

-0.1

Longer working hours

0.4

0.4

-0.2

NOTE:

It is assumed that unemployment benefit recipients and cash benefit recepients, who get employed, will earn 72 percent or 60 percent compared to the wage of an average full time employed. SOURCE: Special run from DREAM (2013f).

Page 13

The new labour market Other countries have caught up with DK

While the development in the overall Danish labour market participation has basically remained unchanged since 1983, the majority of other countries have been able to expand their labour market participation. Countries that were in a considerably lower position 30 years ago, like the Netherlands, Germany and Australia, have by and large caught up with Denmark. Labour market participation and employment go hand-in-hand. Higher labour market participation will also mean higher employment in the longer run, which again provides higher growth. A high labour market participation is therefore crucial to creating growth and prosperity in a country.

Potential for 220,000 more people in the labour force

If Denmark were able to expand the labour force to the same level as those countries that have higher labour market participation rates in 2012, it would correspond to an expansion of the labour force of up to 220,000 persons, see figure 8.

Figure 8

Potential for extra labour force Potential extra persons in the labour force (15-64-year olds), 1,000 persons 250

250

200

200

150

150

100

100

50 0

NOTE:

50

Same labour market participation as Same labour market participation as Iceland Switzerland

0

Calculated as the difference in labour market participation among 15-64 years old in the period 2008-2012 between Denmark and the other country multiplied by the population in Denmark in the age-group in 2012. SOURCE: Data extract from OECD, LFS by sex and age – indicators and own calculations.

Page 14 Women's entry into the labour market made the Danish labour market participation the world's highest. But parallel with women entering the labour market, mens participation rates dropped and their labour market participation is currently significantly lower than 10, 20 and 30 years ago, see figure 9.

Figure 9

Women entering – men exiting 100

Labour force’s proportion of 15-69-year olds, percent

100

Men

80

80

Women

60

60

40

40

20

20

0

1950

1960

1970

1980

1990

2000

2012

0

SOURCE: Statistics Denmark (2008 as well as data extract from Eurostat, LFS table Ifsa_pganws and own calculations for 2012.

Danish women's labour market participation no longer unique

Danish women's labour market participation is no longer at the top but has been overtaken by countries such as Sweden and Switzerland, while women in Norway, the Netherlands and Canada participate in the labour market to almost the same extent as Danish women.

Political initiatives have drawn people out of the labour force

Men in other OECD-countries also have a higher labour market participation than Danish men - with the exception of Norway. Over time, many different political initiatives have impacted labour market participation in Denmark. For example, the early retirement scheme has permanently reduced the proportion of men and women who participate in the labour market after the age of 60. In the 1990s, the figures were also impacted by leave schemes, transition benefits etc. and later, illness, maternity leave and cash benefits have also experienced an increased intake. There are no age groups where Denmark has a record in labour market participation. The difference in the best OECD countries is largest among young people and among the elderly, see figure 10.

Page 15

Figure 10

Lower labour market participation in Denmark in all ages 100

Labour market participation distributed between ages, percent, 2012 Denmark OECD Highest in OECD

100

80

80

60

60

40

40

20

20

0

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+

0

Ages

NOTE:

Highest in OECD is the highest participation rate in the given age-group among the OECDcountries. For 15-24 years old Iceland has the highest participation rate. For 25-29 years old it is Switzerland. For 30-39 years old it is Slovenia. For 40-54 years old it is Czech Rebuplic. For 55-59 years old it is Sweden. For 60-69 years old it is Iceland and for 70 + it is South Korea. SOURCE: Data extract from OECD, LFS by sex and age indicators.

For the older age groups, the retirement reform will mean an increased labour market participation, however, only in the years after 2019. 30-59-year old Swedes have higher labour market participation

Even in the age groups with the highest labour market participation traditionally - the 30-59-year olds - there is also potential to expand the labour supply compared to other countries. In Sweden, Iceland and Switzerland the labour market participation for these age-groups is between 1-3 percentage points higher than in Denmark.

Unskilled persons in particular have lower labour market participation in Denmark

This is especially due to a difference among persons without education. Among this group, 2-4 percentage points more Swedes and Swiss participate on the labour market than among Danes, see figure 11.

Page 16 Figure 11

More unskilled persons in the labour force in other countries

Labour market participation in Sweden/Switzerland with deduction of labour market participation in Denmark for 30-59-year olds, percentage point, 2012

4

Sweden

Switzerland

4

2

2

0

0

-2

Primary and lower secondary school/unskilled

High school and vocational

Further education

-2

NOTE:

Positive values means that 30-59 years old in the respective country has a higher labour market participation rate than Danish 30-59 years old. Negative values that the other country has a lower participation rate for the age group than Danish persons. SOURCE: Data extract from Eurostat, LFS table lfsa_agaed and own calculations.

Still many unskilled jobs in Denmark Every sixth job is filled by unskilled persons

Every sixth job in Denmark is performed by an unskilled person, i.e. a person who has primary and lower secondary school as the highest completed education. In Sweden and Norway this applies to approximately every seventh job while in Finland and Germany, the proportion is even lower. Here, this applies to every tenth job, see figure 12.

Page 17 Figure 12

Every sixth employee in DK is unskilled 30

Proportion of employees with primary and lower secondary school, 30-64-year olds, 2012

30

Germany

Finland

Switzerland

Norway

Sweden

0

United Kingdom

10

Denmark

10

The Netherlands

20

Iceland

20

0

SOURCE: Data extract from Eurostat table lfsa_egaed and own calculations.

Denmark has the most jobs at low qualification level

A large proportion of the unskilled persons perform jobs at the lowest qualification level, such as cleaning, kitchen assistance or driver jobs. Every third unskilled person is employed in a job at the medium level, while 8 percent are employed in jobs at the highest qualification levels such as freight forwarding work, IT operation, etc. Denmark is among those countries with the highest number of unskilled persons who work at a high qualification level, see figure 13.

Page 18 Figure 13

Same proportion of unskilled persons in jobs at high level in DK Proportion of unskilled employees at high qualification level in comparison to all employees at high qualification level, percent 1999 2012 18

18

15

15

12

12

Germany

Finland

Sweden

Switzerland

0

Norway

3

0

Denmark

3 The Netherlands

6

United Kingdom

9

6

Iceland

9

NOTE: Unskilled are persons with only primary and lower secondary school (ISCED 0-2). SOURCE: Data extract from Eurostat table lfsa_egised and own calculations.

Same proportion of unskilled persons in jobs at high level in DK

The tendency across countries is that fewer unskilled persons (with only primary and lower secondary school education) have jobs at high qualification level. In the United Kingdom, the proportion has dropped by 5 percentage points from 1999-2012 so in 2012, 8 percent of employed persons at a high qualification level are unskilled. The same tendency has not been the case in Denmark. Here, more or less the same proportion of unskilled persons have jobs at a high qualification level in 2012 as in 1999. Foreign labour works at low and high level

15 percent within manual work are foreigners

There are many foreign workers in Denmark. Of the overall employment, approx. 5 percent have a foreign citizenship. In companies covered by the Danish Confederation of Employers (DA), foreign labour particulary performs jobs at a low qualification level, mainly in the form of manual work where they comprise of almost 15 percent of the employment, see figure 14.

Page 19 Figure 14

Many foreigners within manual work 16

Foreign labour as proportion of overall employment within the main job function on the DA area, percent, 2012

12

16 12

8

8

Proportion on the DA area, average

Elementary occupations

Operators, etc.

Service and sales

Craft and related trades

High level

Clerical support

0

Associate professionals

0

Professionals

4

Managers

4

Low level

NOTE: The figures include all employees except young persons and apprentices. SOURCE: Own calculations on the National Labour Market Authority's statistics on foreign labour and the Danish Confederation of Employers' (DA) Structure Statistics 2012.

At high qualification levels there are also relatively many foreigners who work - as engineers in particular. Conversely, less than 2 percent of all jobs at the medium-high qualification level and among managers are performed by foreign employees. Many of the companies who have foreign employees, have employed them due to lack of Danish employees or due to a lack of persons with specific skills. However, according to the companies, the wages only play a minor role, see figure 15.

Page 20 Figure 15

Foreigners employed due to skills and lack of labour

40

Companies with foreign labour, percent, 2013 “Which of the following options are incorporated in the companies’ motivation to employ foreign employees?”

40

30

30

20

20

10

10

0

Specific skills

Lack of Danish labour

Other

Previous experience

Increased flexibility in regard to working hours

Reduction in wage expenses

0

NOTE: Answers from 502 companies with foreign employees. SOURCE: Epinion for the Confederation of Danish Employers (DA), November 2013.

Foreigners on the DA area covered by the same rules as Danes

Table 2

On the DA area, Danes and foreign employees have the same working conditions. Wages, pension, sickness payment and other working conditions are regulated in the collective agreements. On the DA area, foreign employees are covered by collective agreements to the same extent as Danish employees, see table 2.

Danes and foreigners equally covered by collective agreements Collective agreement coverage, 2012 Private sector

Total employees 1,000 full-time

Foreign employees

Percent

1,000 full-time

Percent

1,355

74

86

66

653

88

37

84

65

89

2

89

- Other/non-union

638

59

47

51

Public sector

788

100

25

100

2,143

84

111

74

- DA Financial sector

Total NOTE:

Excluding persons working in a foreign company in Denmark – approximately 5,000 full-time employees. SOURCE: Special run from Statistics Denmark, Special run from The National Labour Market Authority (Job efforts), DA, FA, Eurostat and own calculations.

Page 21

In general, 88 percent are covered by a collective agreement in the DA area and the same degree of coverage applies more or less among foreigners. In the rest of the private sector, it is difficult to assess the extent of collective agreement coverage. If foreigners work to the same extent as Danes in companies with a collective agreement, the overall collective agreement cover among foreigners on the Danish labour market is 74 percent against 84 percent among Danes. Fewer foreign employees on social support Half remain in Denmark five years after immigration

Among the 16,000 persons who immigrated to Denmark for employment in 2008, just half continued to remain in the country five years after and by far the majority were employed, see figure 16.

Figure 16

Foreign labour remains employed Foreign labour immigrated in 2008 and the persons’ primary status in the following years, 1,000 persons 16

Employed and under education

On social support

Emigrated

12

16 12

8

8

4

4

0

2008

2009

2010

2011

2012

0

NOTE: Social support includes unemployment benefit, sickness benefits, leave schemes etc. SOURCE: Special run from Statistics Denmark migration data as well as The Ministry of Employment's DREAM register data.

Nine out of ten foreigners support themselves

A smaller proportion of newly immigrated foreigners are on social support. Persons of Danish citizenship in the age group 16-64 years were employed, undergoing education or self-supported 75 percent of the year 2012. The corresponding figure was 89 percent for immigrants from EU countries who immigrated to Denmark in the period 2008 to 2012, see figure 17.

Page 22 Figure 17

Fewer new immigrants on social support Proportion of 16-64-year olds, percent, 2012 Employed and under education

On social support

100

100

75

75

50

50

25

25

0

Danish origin

Immigrated from EU Immigrated from noncountry 2008-2012 EU country 20082012

0

SOURCE: Own calculations on the basis of Statistics Denmark's migration data and The Ministry of Employment's DREAM register.

Among foreigners from non-EU countries who immigrated in the period 2008-2012, the time in employment or self-support was at the same level as Danes. Western immigrants contribute positively to public finances

The high degree of employment for immigrants means that they contribute to the Danish economy and to the public finances. The group of immigrants from western countries are the only ones contributing positively to the public sector on average over a life time, see figure 18.

Page 23 Figure 18

Western immigrants contribute positively to public sector

20

Average net contribution to the public coffers per person year for generation 2013, DKK 1,000 at 2013 level

20

15

15

10

10

5 0 -5

Danish origin

Non-western immigrants

5 Western immigrants

0 -5

-10

-10

-15

-15

-20

-20

NOTE:

Western countries are EU, Andorra, Australia, Canada, Iceland, Liecthenstein, Monaco, New Zealand, Norway, San Marino, Switzerland, USA and the Vatican State. SOURCE: DREAM(2013b).

The positive contribution is due to the fact that the overall tax payments for this group exceed the public expenses for health, education, etc. which the group consumes over their lifetime. The opposite applies to Danes and immigrants from non-western countries.

Page 25

High job mobility reduces unemployment The high job mobility in Denmark helps to ensure that job openings constantly occur, which also makes it easier for unemployed to find jobs. Even though many persons become unemployed every month, there are also many unemployed persons who regain employment and consequently there are fewer unemployed persons for longer periods. Denmark is among those countries with the lowest long-term unemployment and is at the same time among those countries with the highest job mobility. There is a clear relationship between long-term unemployment and job mobility, see figure 19.

Figure 19

Connection between mobility and unemployment Long-term unemployment as proportion of the overall unemployment, percent, average 2005-2012 80 80

60

60

40

DNK ISL

8

GRC 40

NLD ESP

GBR

20

0

DEU

EST

NOR

20

SWE

9 11 12 10 Average length of job tenure, year, 2011

13

14

0

NOTE:

The red line is statistical significant. Average length of job tenure is calculated by letting every country have the same age-distribution as average OECD. SOURCE: Own calculations on the basis of Stats. OECD.

Men change jobs more often than women Men change more than women

Men change jobs more frequently than women. Women are most mobile around the age of 18-20 years, while for 20-24-year olds, mobility for men and women is more or less the same. Around the age of 25 years, women's mobility drops significantly and the difference between men and women is only slightly equalised in line with their age, see figure 20.

Page 26

Figure 20

Men change jobs more often than women Proportion of employees in the age group who change to a new job, percent, June 2011 – May 2012 60

60

50

50

40

40

30 20

20

Women

10 0

30

Men

20

25

30

10 35

40

45

50

55

60

65 70 Age

0

NOTE:

Job mobility is measured as total job leaves as a share of average number of employees during June 2011 – May 2012. SOURCE: Own calculations on Statistics Denmark's Employment for Employees and Population Register.

Drop in job mobility among women is probably due to motherhood

The lower job mobility for women aged 25-34 years is probably connected to many in this age group are having children. Naturally, this applies to both men and women, but women's mobility drops considerably more when they have younger children. This applies especially if the children are between 0-3-years old but the effect still exists with children between 4-6-years old.

Proportion of persons changing jobs increases over time

Measured in a single year, 14 percent of employees changed jobs. The proportion of employees who change their jobs obviously increases, over time and when seen over a four-year period, about every third employee has changed their job at least once, see figure 21.

Page 27 Figure 21

Not all employees are equally mobile Proportion of employees who change to a new job, percent, May 2008 – June 2012 1 change 2 changes 3+ changes 40

40

30

30

20

20

10

10

0

Job change in 1 year

Job change in 2 years

Job change in 3 years

Job change in 4 years

0

SOURCE: Own calculations on Statistics Denmark's Employment for Employees and Population Register.

Some do not change jobs at all over a four year period

About 7 percent of employees have changed their jobs three or more times measured over a four-year period. A large part of the high Danish job mobility is driven by a group of employees with many job changes. Of the two-thirds of employees who have not changed jobs over a fouryear period, there is probably a considerable proportion who only make a few job changes or do not change jobs at all in their working life. High occupational mobility

Six out of ten change job to a job in another industry or job function

About half of the employees who change jobs also change industry. And if changes in job functions are included, then six out of ten are occupationally mobile. It is especially within the arts, entertainment and recreation industry that occupational mobility is high. Here, 84 percent change industry and/or job function. The other end of the spectre includes public administration where 31 percent change industry and/or job function, see figure 22.

Page 28 Figure 22

High occupational mobility among persons who change jobs Proportion of employees who change jobs who also change industry or job function, 30-year olds and above, percent, June 2011- May 2012 100

100

Public adm., etc.

Real estate activities

Electricity supply, etc.

Financial activities, etc.

Water supply, etc.

Transporting, etc.

Human health, etc.

Other services

Wholesale, etc.

Construction

Agriculture, etc.

Prof. activities, etc.

Education

0

Information, etc.

25 Adm. activities, etc.

25 Manufacturing

50

Accommodation, etc.

50

Arts, etc.

75

Mining etc.

75

0

NOTE:

Job mobility is measured as total job leaves as a share of average number of employees during June 2011 – May 2012. SOURCE: Own calculations on Statistics Denmark's Employment for Employees and Population Register.

Occupational mobility provides jobs - also for unemployed

The high occupational mobility among employees is an indicator of a flexible labour market. It is essential that the public job centres support this and guide unemployed persons to seek jobs within industries and job functions where job openings exist. A stricter control of the labour market lowers job mobility

Job mobility affected by control

Job mobility is affected by many conditions. Tax on work and the support level in the event of unemployment are two factors that are of especially great importance. A strict regulation of the labour market also means lower job mobility. The more difficult it is to dismiss employees, the fewer job openings on the labour market and consequently a lower job mobility. Job mobility in Denmark is very high while, for example, the employment protection regulations is at an average level, see figure 23.

Page 29 Figure 23

Dismissal limitations lower job mobility Average length of job tenure, number of years, 2011 13 12

AUT

11 10 GBR

9 8

POL DEUESP IRL NLD FIN CZE SWE HUN SVK NOR CHE ISL DNK

1

GRC SVN ITA BEL PRT

13

FRA LUX

EST

2 3 4 Rules on employment, index 0-6, 0=none, 6=strict, 2013

12 11 10 9 8

NOTE:

The red line is statistical significant. Average length of job tenure is calculated by letting every country have the same age-distribution as average OECD. SOURCE: Own calculations on the basis of OECD Employment Protection Database, 2013 and Stat.OECD.

Strict rules can reduce young people’s' access to the labour market

When the demand for labour drops, as in the current crisis, it can be difficult for young people to find a foothold on the labour market in countries where the regulations of fixed term contracts are strict. Temporary employment contracts can otherwise be a stepping stone for youngas well as unskilled persons towards a more stable connection to the labour market, see EU (2013). Employment protection does not provide increased job security Stricter rules on employment should increase job security among employed. However, there is no connection between how strict the rules on employment protection are and the perception of job security among employed. In Denmark, job security is particularly high, see figure 24.

Page 30 Figure 24

Stricter rules do not provide job security 50

Proportion of employees who are worried about losing their job, percent, 2011

40

40

SVK POL

30 IRL

20 GBR

10 0

50

1

SWE

EST

ESP PRT SVN ITA

HUN NLD CZE BEL DNK DEU FIN AUT

30 20

FRA LUX

2 3 Rules on employment, index 0-6, 0=none, 6=strict, 2013

10

4

0

NOTE:

There is no significant relationin the diagram – no matter whether the OECD-index is included or the index from World Econmic forum. Employees who are worried about losing their job has replied ”not very” or ”not at all” to ”How confident would you say you are in your ability to keep your job in the next 12 months SOURCE: Own calculations on the basis of OECD Employment Protection Database, 2013 and Eurobarometer 2011.

There is even a general indication that employees have a percetion of higher job security in countries with high degree of rules on employment protection. Important to distinguish between job security and employment security

It is difficult to know whether the employees feel secure in their job (job security) or whether the employees think it is relatively easy to find af new job if fired easily (employment security). With 800,000 job openings in Denmark every year, there are consequently many opportunities to get a new job if one were to be fired. The situation in Denmark is also that employment rights such as pension savings, are not connected to specific employment relationship but rather the individual's association with employment. These rights do not consequently disappear with a change of job.