An expert group has presented a series of recommendations after a year of intensive work that suggests the most comprehensive reform of the employment efforts in Denmark ever. The reform includes fewer meetings, fewer rules, and a significant reduction in sanctions.
According to the expert group, led by economics professor Claus Thustrup Kreiner, job centers should be abolished, and citizens with complex problems should not be sanctioned as a starting point. The group proposes abolishing half of the existing rules and removing nine out of ten sanctions. This is due to the fact that over the years, more target groups and rules have been added, making the system both expensive and complex.
Denmark currently spends 11.5 billion Danish kroner annually on employment efforts, making it one of the most expensive systems in the world. The government plans to reduce this amount by three billion kroner annually from 2030. This means that resources for guidance and sanctions will be significantly reduced for citizens further away from the labor market unless “trust is broken.” Sanctions will continue to be used for those closer to the job market, as there is evidence that it works in these cases.
One of the key recommendations from the expert group is to remove the current 13 target groups in the employment system and replace them with five new ones. This is intended to simplify the system and reduce the feeling of disempowerment among citizens. Resource courses, intended for citizens with complex problems, are proposed to be abolished, while savings can be found in job clarification courses for sick citizens.
Municipalities and unemployment funds will have greater freedom to help those citizens who can and want to support themselves, which is not overall assessed to diminish the employment efforts. The reform is expected to have a small positive impact on employment with 500 more citizens in jobs by 2030. Although the expert group recommends abolishing job centers, it will be up to individual municipalities to decide how they will organize the efforts going forward.
It is also proposed to introduce a fee of 500 Danish kroner for citizens close to the labor market if they forget to cancel an appointment. This is considered fair, as sanctions have been shown to be effective for resourceful citizens. The number of meetings in municipalities and unemployment funds is estimated to be reduced by 500,000, resulting in 3,500 fewer caseworkers.
The government has previously been criticized for announcing a saving of three billion kroner annually before the expert group had presented their proposals for improving the system. Now, the government will take the time to review the recommendations and then present a proposal for negotiation by the Danish Parliament. This is expected to happen after the summer.