Disability Pensions and Active Labor Market Policy

Abstract

ABSTRACT Danish active labor market policy, under the headline of flexicurity, has received international attention due to its claimed ability to curb unemployment while boosting employment. A strong belief in the positive effects of activation, in policy as well as practice, has had consequences for all client types, including those who are far from labor market participation due to social, mental, physical, or other problems. We analyze the application of active labor market policy measures used to support clients with substantial problems besides unemployment. This study utilizes Danish register data that encompass all people residing in Denmark. Using sequence analyses combined with qualitative data, the authors conclude that the intensive use of active measures does not correspond to lower awarded disability pensions. In fact, the analysis suggests that the intensive use of active measures may in some respects have negative consequences. Hence, future research should further explore the implications of different patterns of timing of active labor market measures for clients as well as for social service providers.