1. Nordic Welfare: A DIY Guide Jon Kvist Centre for Welfare State Research University of Southern Denmark

2. Denmark – the land of fairytales and LEGO

4. High equality Between rich and poor Between men and women Incomes Employment Earnings Subjective measures

5. High employment For all Particularly for women The higher the skills, the higher the employment High employment is important: -To increase welfare -To finance welfare Without high employment, no “welfairytale”  how to make the welfare model employment-friendly?

6. Question: The Welfare Puzzle Low wage inequality High employment Generous cash benefits High taxes Activation requirement polices moral hazard Encompassing labour, social, educational and health services that helps to create, maintain and utilize human capital Answer: Employment-friendly policies ≠ =

7. Nordic approach Goal is to maximise the realization of human capital for all Almost all public policies are directed towards increasing work Welfare model not only about securing a safety net or providing insurance and compensation, but also social investments

8. Social investments over the life course ChildhoodYouthWorking ageFertilleOld

9. Social investments: Example of policies ChildhoodYouthWorking ageFertilleOld Early childhood education and care Primary, secondary and tertiary education Care for children and elderly, leave schemes Life-long learning, ALMP Home help, health care

10. Social investments: Returns Childhood YouthWorking agedFertile Old age Rate of return Cognitive skills Competences and knowledge Skills and taxes Children Less expenses

12. Social investments Insurance Safety (Re)distribution The Welfare Circus

13. Equity versus efficiency Standard focus Negative trade-off through distortions from redistributive policies Scandinavian focus 1.Insurance promotes risk behaviour 2.Human capital investments increase qualifications 3.Cash benefits are automatic stabilizers 4.Moral hazard can be policed

14. Life satisfaction UK DK

15. Organisation of welfare services Authority to tax Legislate on cash benefits Tertiary education Authority to tax Social services -Childcare -Elderly care Education Employment services Some health services In part reimbursed in part by state for cash benefits Inter-municipal redistribution No authority to tax Health services StateRegions (5) Municipalities (98)

16. Active labour market policies Duration of unemployment spell Workfare intensity Job search Contact to job exchange Short programmes Counciling Job search courses Targetted programmes: Training Education

17. Workfare: Linking benefits and activation Average production worker Low income worker Active job search Activation offer: right and duty Full time activation Months Active job search Activation offer: right and duty Activation intensity Benefit generosity Unemployment insurance

18. Workfare experiences Economic incentives Activation Subsidised jobs Rehabilitation Generally, small (employment) effects, depend on target group and on economic cycle Generally, motivational effects are important

19. Changing demographics Changing household composition Ageing populations More ethnic diverse populations (Re)conciliation of work and family life Less people to care and finance more elderly Maintain solidarity Challenges GBRGBR DK

20. GBR DK Trust in others

21. The way we combine Lego bricks constitute our welfare societies Employment protection Social security Active labour market policies Social services …. AND THUS THEIR SOCIAL AND ECONOMIC SUSTAINABILITY ÷ +÷ + + + + ÷ ÷ ÷ ÷ ÷

22. Lego bricks in the Danish model Employment protection legislation Active labour market policy Social securitySocial services LaxRights and dutiesEncompassingAccessible, good quality childcare Contact and talksGenerous for low income groups Encompassing elderly care Job subsidy In-work training Courses and education Sanctions

23. DenmarkGermanyUK Unemployment insurance benefits 90% of wages, 2 years Childcare984622 Note: Formal childcare for children aged 3 years to minimum compolsory schoold age, childcare 30 hours or more weekly, percentage of children in age group

24. In short By whom, where and when you are born matters for your life chances No big trade-off between efficiency and equity Social security provide redistribution and insurance Activation polices moral hazard The effects of active labour market policies depends on; economic cycle; type of instrument and target group, program length, sequencing and timing; etc. Social investments crucial, especially in: – Knowledge based societies -People before they become adults -Kids with disadvantaged family backgrounds

25. Is the Nordic model sustainable? Maintain high employment rates Avoid increase in long term unemployment and marginalization Not new challenges, but changing focus and forms Other forms of equality: gender, age, persons with handicaps and illness, ethnicity, regional etc. Social investments more needed than ever

26. Crisis perspectives Cohort effects Intergenerational effects European polarization Labour market polarization Nordic model here to stay

27. Thanks for your attention www.jonkvist.com Good luck with the Scottish Model!