Work Incentives in the Danish Welfare State: New Empirical Evidence - Softcover

In Denmark, as in other Nordic countries, the period since the 1950s has witnessed the development of a modern welfare state with comprehensive public responsibility for the social well-being of the population. But how does this very fine-meshed safety net affect the labour supply - both on the market for legally registered, taxed labour, and on the market for undeclared 'black' labour? Does the welfare state provide too few incentives for the unemployed to seek work, and for those who are employed to work longer hours? And is it the case that the incentive structure encourages do-it-yourself activities?
With the support of the Rockwool Foundation, an extensive research project has been carried out, which methodically combines the results of a representative survey with register data.
The results, which are presented in this volume, provide a detailed insight into the links between the tax system and the social legislation of the welfare state on the one hand, and the actual behaviour of the Danish labour force on the other.

Denmark, like other Scandinavian countries, is a modern 'welfare state' with comprehensive public responsibility for the social well-being of the individual. But how does the existence of an economic 'safety net' affect the labour supply? Are there fewer incentives for the unemployed to seek work? Does the incentive structure of the welfare state encourage 'black' work, tax evasion and do-it-yourself activity? These are some of the questions addressed by an extensive research project sponsored by the Rockwool Foundation. The results are presented in this volume, providing a detailed insight into the relation between the social legislation of the welfare state on the one hand, and the behaviour of the labour force on the other. Although based on a study of the Danish experience, the findings presented here should be important to any discussion of the modern welfare state.