The Danish Labour Market Model
The Danish labour market model is renowned for combining a high degree of flexibility for employers and security for workers. In addition, the labour market parties (trade unions and employer organizations) have a long tradition of conducting collective bargaining to regulate key elements such as wages and working conditions. Since collective agreements cover important components of labour market regulation, Danish labour market policy has been focused on correcting imperfections in the labour market through an active labour market policy. However, since the new millennium, a number of policy changes have created a significant impact on the Danish labour market model, especially in terms of eroding the security elements of the model. Additional fundamental changes might also be linked to structural effects such as a decreasing trade union density and declining collective bargaining coverage in some parts of the private sector.