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Employment strategies for Europe: lessons from Denmark and the Netherlands

Published online by Cambridge University Press:  26 March 2020

Ray Barrell  and
Veronique Genre
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Abstract

Labour market reform has become a central policy issue for many European countries, and there are lessons to learn for the further development of the New Deal in the UK. We discuss reforms in Denmark and the Netherlands, and look at their implication for employment and earnings. The Dutch started a sequence of reforms in the early 1980s based around wage moderation. Real wages per person hour rose less rapidly than elsewhere in Europe, and employment rose more strongly. Other reforms made the labour market more flexible, and many part-time jobs were created. The Dutch can claim to have succeeded in improving their labour market preformance. The Danes started serious reforms in the 1990s, and individuals on social benefits have a right and a duty to be activated. Registered unemployment has fallen sharply as a result of these New Deal style policies, but only some of these individuals have moved into employment. Increased flexibility, moderate real wage growth and active support for job-seekers all seem to help reduce unemployment and raise employment. Evidence from Denmark and the Netherlands suggests that making work relatively more rewarding helps to reduce inactivity and unemployment.

Type
Research Articles
Information
National Institute Economic Review , Volume 168 , April 1999 , pp. 82 - 98
Copyright
Copyright © 1999 National Institute of Economic and Social Research

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Footnotes

∗

We should like to thank our colleagues Hilary Metcalf, Rebecca Riley and Dirk Willem te Velde for their comments and assistance in preparing this article. We have gained from discussions with a number of people in the Netherlands and Denmark, and we have greatly appreciated the help and written communications of Barthold Kuipers of the CPB-Netherlands Bureau of Economic Research and Mona Larsen of the Danish Social Forsknings Instituttet. Comments should be addressed to the authors at the National Institute of Economic and Social Research, 2 Dean Trench Street, Smith Square, London, SW1P 3HE. Tel. no. 0171 654 1925, e-mail: r.barrell@niesr.ac.uk.

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