AØKA08184U The Danish Welfare model - for exhange students

The Danish Welfare model is known as one of the most extensive and generous government model in the westerly part of the welfare states. The public sector constitutes the largest part in the world (59% of GDP) and over 2 million Danes (out of a population of 5,6 million people) receives transfers from the state. With the “free principal” in education, health and services for handicapped and elderly, the Danish Welfare thinking is driven far more forward than even the most modern European welfare states.

That is why there are good reasons to study the Danish welfare society. Even though the Danish model is known and famous all over the world, there is sparingly little qualified literature in English about this subject.

The Danish model points out, that there has not been accept of the consequences the market forces have had on the economic distribution of income, benefits and vital services as health.

The Danish state has therefore taken action to avert the market forces not just to correct market failure and secure calm and safety in the society, but specially to secure a more evenly distribution of incomes through collective insurance via the state. This means:

• That the state has guaranteed the citizens a certain minimum income.
• That the state has secured the population equal access to the best standard for service, health and education.
• And that the state through social insurance have tried to limit the risks in life, as illness, age, unemployment and handicaps.

With the world’s largest public sector – measured in GDP - the tax level in Denmark is high. To much surprise the working force is - measured up to the whole population – substantial. The Danish welfare state has until now delivered remarkable results. There is a relatively low unemployment rate – conditioned of a substantial mobility on the labor market within a relatively effective Flexicurity model. The generous “free principal” and transfers factors a valuable stabilized demand effect on the Danish macro economy. The standard for education is in average one of the best in the OECD countries. Even though the public sectors economy in these years is marked by substantial deficits – the Danish Welfare model have been coping through as one of the best in the west.

The result is a high GDP “per capita” and one of the most equal distributed economies between rich and poor.

The model is facing substantial challenges. The productivity development seems slow in the country and the working force is decreasing on account of the ageing in the Danish society. Therefore the ongoing reform efforts will be a subject for scrutiny on this course – with special weight on the welfare policy. The sustainability in all the welfare system, the welfare states need for working forces, and the challenges from the globalization.