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Given the ageing challenges, there is an increasing pressure in OECD countries to promote longer working lives. This report provides an overview of policy initiatives implemented in Denmark over the past decade. Even if these recent reforms are well in line with the recommendations of the 2005 OECD report Ageing and Employment Policies: Denmark, the focus has been put mainly on the supply side. The aim of this new report is to identify what more could be done to promote longer working lives. As a first step, the government should assess closely the implementation process to ensure that the expected outcomes of the reforms are achieved. More broadly, the strategy should act simultaneously in three areas by: i) strengthening incentives to carry on working; ii) tackling employment barriers on the side of employers; and iii) improving the employability of older workers.

Like many other countries, Denmark is facing the challenge of population ageing. The ratio of the population aged 65 and over to the population aged 20-64 is projected to increase from 30% in 2012 to 43% in 2050. Even so, the ageing process is slower than in many other OECD countries, making Denmark better positioned to meet the demographic challenge.

Given the phenomenon of rapid population ageing, providing older people with better work incentives and choices is tremendously important, both in order to promote economic growth and to help sustain public social expenditures. Therefore, in 2011 the OECD Employment, Labour and Social Affairs Committee decided to carry out a new series of policy reviews to encourage greater labour market participation at an older age, through the fostering of employability, job mobility and labour demand. It builds upon previous work that the OECD has conducted in this area in the Ageing and Employment Policies series, summarised in the Organisation’s major cross-country report Live Longer, Work Longer, published in 2006.

This chapter offers a first look at Denmark’s situation with regard to meeting the demographic challenge of an ageing population. The country is positioned in relation to other OECD countries with regard to old age dependency ratios, and life expectancy figures for men and women are compared with those of other European countries. The chapter concludes with a summary assessment of the extent to which Denmark has followed the OECD recommendations from the 2005 report, Ageing and Employment Policies: Denmark. This assessment based on action taken between 2005 and 2012 is useful to identify areas where more could be done, covering both supply-side and demand-side aspects.

This chapter analyses the extent to which there are employment barriers in firms for older workers. Efforts to manage age diversity in the work setting are examined, such as tackling age discrimination; limiting mandatory retirement ages; and reaching collective labour agreements that establish frameworks aimed at the retention of older workers. Provisions such as “senior days” in regions and municipalities are enumerated, and the relationship between wages and older workers’ productivity – as perceived and as documented – is discussed. The importance of flexible wage setting is highlighted, as is the value of (as yet rare) senior entrepreneurship.

Both employment and unemployment for older people have risen over the past decade in Denmark. Incentives and provisions to retire early were previously too generous, explaining Denmark’s high level of reform efforts in recent years. The 2006 Welfare Agreement and the 2011 Agreement on Later Retirement are important steps taken to reduce the burden of an ageing population. Further efforts are needed to implement a broader strategy to promote longer working lives.

This chapter examines the skills and health factors as well as the working conditions that need to be met with regard to older people in order to make longer working careers a reality. The relationship between skills proficiency and age in what is now a technology-rich environment is scrutinised, as well as perceptions of and motivations for work-related training. The discussion then turns to the importance of health and safety, attention to special needs, and access to flexible working arrangements in preventing attrition of older workers – all reflected in the Senior Starter Kit guide for employers. The roles of unemployment insurance funds (UIFs) and jobcentres are reviewed, and “seniorjobs” and “flexjobs” defined. Main elements of the Koch Commission’s proposed reforms of activation policies to strengthen the focus on enterprises’ labour needs are enumerated. The chapter concludes with an innovation in Denmark that engages the older unemployed themselves in job search: senior networks.

This chapter sets the scene for the book’s later discussions by examining the prospects for older workers in the context of the flexicurity model that characterises the functioning of the labour market in Denmark. It begins with a summary of indicators and a scoreboard that compares the country’s labour market situation with those of other EU and OECD countries. The effectiveness of active labour market programmes is assessed in relation to adjustments made necessary by stress factors, most notably the 2007 financial crisis. Employment rates for older people are presented – with findings from both register-based and labour force survey data – as well as unemployment rates, with special mention of the category “neither employed nor completely retired”. Various aspects of older workers’ low labour market mobility are then discussed.

Major reforms have been implemented in Denmark over the past decade to limit early retirement schemes, remove more favourable rules for unemployment benefits for older workers and reduce pathways through disability benefits. The pension age will be increased gradually from 65 to 67 years over the period 2019-22. Subsequently, the retirement age will be linked to changes in life expectancy. Nevertheless, the effective age of exit from the labour market remained relatively stable in the period under review, and social benefits or special labour market schemes are still routes out of regular work for many older people. The purpose of this chapter is to assess the impacts of the implemented reforms, and to identify remaining challenges and further steps that may need to be taken to encourage longer working lives.