1) Denmark has decreased the unemployment rate from 10.4% in 1995 to
1.8% in 2008 (Exhibit 8) mainly through the increase in the employment in the public sector. Although the set of reform called “flexicurity” may have impacted the decrease in the unemployment rate from, it is difficult to prove its long term impact. The number of the public sector workforce grew by 17.5% between 1995 and 2008 (Exhibit 8). While, the number of the private sector workforce only grew by 2.6% between 1995 and 2008. The ratio of the public sector employment also increased by 6.1% between 1995 and 2008 compared with that of the private sector employment that increased only by 2.5% between 1995 and 2008 (Exhibit 8). It is likely that the government provided a source of employment in the public sector and directly contributed to lower unemployment rate in 2008.
The increases in the public spending on education and health from 1995 and 2008 further imply the role of the government to lower unemployment rate (Exhibit 5). The institutions on healthcare and education such as schools and hospitals may have become places to be employed.
In addition, the political stability and stable currency policy (Page 5) contributed to increase foreign trades and provide efficient source of the income for the government. The country not only exported goods such as industry machinery and transportation equipment but also services and achieved the GDP growth rate by 3% between 1995 and 2005 (Exhibit 3). This continuous GDP growth may have been very important for the government to keep spending on such big public sector.
2) Denmark should continue to walk a fine line between autonomy and
integration. The pros of this is to keep the own currency and its immigrant policy as controllable as possible. While, the cons of this is to lose the control over krone as well as to have less restricted immigrant policies. Because the country has survived from the negative impact of globalization...