Introduction

Denmark is a small country (population 5.25 million) with an active population. Labour force participation is high (78% in the age group 16-66) – mainly due to the fact that Danish women have nearly as high a participation rate as men (73% compared to 82%, Danmarks Statistik, 1997). Nonetheless, a very large number of people of working age are provided for through public income transfer, via unemployment benefit, social assistance, early retirement pension and sickness benefit. In the period from the beginning of the 1960s to the mid 1990s the number of people receiving these benefits consistently increased alongside high and increasing unemployment (reaching more than 12% in 1994) before decreasing again (to about 6% in 1999).

The main cause of high levels of cash transfer was the long period of high and increasing unemployment between 1974 and 1994. Developments in technology, new organisational forms and competitive working practices have led to a long-term trend towards increased demand for general and vocational qualifications as well as interpersonal skills. A consequence is that more and more people have found themselves judged unable to perform to required standards. In addition, increased labour market participation among women has led to an increased number claiming benefits related to lack of work.

In response to the increasing numbers of working age people receiving out-of-work state transfers, successive Danish governments have developed an ‘Active Line’ which links social and labour market policy. The underlying principle behind the Active Line is that ‘workless’ people in receipt of public income transfers should be participating in activities which bring them closer to the labour market, and which are beneficial to society as a whole. This line was increasingly emphasised throughout the 1990s.

In the past, ‘active measures’ (for example, training and publicly supported work) were offers or options that unemployed people and social assistance clients could take up if they chose to do so. However, increasingly, active measures have become both a right and an obligation for recipients. This is the essence of one form of compulsory active measure – here termed ‘activation’. Currently, all clients must receive an activation measure after a standard period in receipt of unemployment benefit or social assistance. If such a measure is refused outright, public economic assistance is, in principle, suspended. Measures often, but do not always, include a workbased component.