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OECD Economic Surveys: Denmark 2006

image of OECD Economic Surveys: Denmark 2006

This edition of OECD's periodic survey of the Danish economy finds overall good performance but warns of overheating and a weak outlook.  It examines in more detail raising the labour supply to safeguard welfare, improving educational provision and making incentives more compatible with societal needs, and introducing more flexibility and less subsidy in housing. 

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Raising Labour Supply to Safeguard Welfare

In order to safeguard the welfare state, labour supply must be boosted from a wide range of sources to compensate for the growing share of the population that will be in retirement in the future. This chapter first looks at core workers. Previous OECD Surveys have recommended significant changes to stem early retirement, and the initiatives currently being debated are evaluated on this basis. At the same time, more of those at the margin of the labour market could be helped to enter an active working life, including those with long-term sickness and not-too-severe disability, limited skills or migrant background. Finally, the chapter considers how Denmark could benefit from removing barriers for workers from the new EU member states. The related issues of how tax cuts could motivate more labour supply and how to get young people to start and complete studies earlier are addressed in Chapter 3.

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