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The Danish Model - A Study Investigating the Effect of the Flexicurity System on Unemployment

Johansson, Erik LU and Bladh, Gabriel (2021) NEKP01 20211
Department of Economics
Abstract
The main objective of this paper is to assess the impact of the flexicurity system, which was implemented in Denmark in 1994, on unemployment. The Synthetic Control Method (SCM) is used to construct a counterfactual scenario of what the situation would have been like in Denmark in the absence of the flexicurity reform. Our results suggest that the unemployment level in Denmark has been on average 2.431 percentage points lower for women, 0.902 percentage points lower for men, and 1.521 percentage points lower in total during the period 1994–2008 than it would have been without the flexicurity system. The results also pass several placebo and robustness tests, which strengthens the validity of the results.
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author
Johansson, Erik LU and Bladh, Gabriel
supervisor
organization
course
NEKP01 20211
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Flexicurity, Unemployment, Denmark, Synthetic Control Method
language
English
id
9061985
date added to LUP
2021-08-17 14:47:09
date last changed
2021-08-17 14:47:09
@misc{9061985,
  abstract     = {{The main objective of this paper is to assess the impact of the flexicurity system, which was implemented in Denmark in 1994, on unemployment. The Synthetic Control Method (SCM) is used to construct a counterfactual scenario of what the situation would have been like in Denmark in the absence of the flexicurity reform. Our results suggest that the unemployment level in Denmark has been on average 2.431 percentage points lower for women, 0.902 percentage points lower for men, and 1.521 percentage points lower in total during the period 1994–2008 than it would have been without the flexicurity system. The results also pass several placebo and robustness tests, which strengthens the validity of the results.}},
  author       = {{Johansson, Erik and Bladh, Gabriel}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Danish Model - A Study Investigating the Effect of the Flexicurity System on Unemployment}},
  year         = {{2021}},
}