Flexicurity : the Danish labour market miracle.

The Danish Flexicurity model which has been endorsed by European Union leaders and the European Commission has drawn much praise from the rest of the world due to the miracle it created in the Danish labour market. Flexicurity has primarily been linked to low unemployment rates and thus we sought to examine the components within Flexicurity through a multiple regression model. Through our model, we discovered that all three components of Flexicurity affected the Danish unemployment rate. A negative and significant relationship was established between Denmark’s unemployment rate and her flexibility in hiring and firing as well as her active labour market policies. However, a positive and significant result was obtained for unemployment benefits. Having acquired notable results, we went on to investigate the effects of these three components on other countries whose labour markets were performing outstandingly well. With missing components of Flexicurity in these countries, we were able to perceive the relative importance of each component through the different performance of each country. We concluded that while Denmark has achieved an effective way to regulate her labour market, Flexicurity may not be easily replicated in other countries. Hence, countries should find their own golden formulas based on their respective socio-economic conditions.Bachelor of Art