Decentralisation of active labour market policy

• Author: Directorate-General for Employment, Social Affairs and Inclusion (European Commission)
• Pages: 58-59

SOCIAL INNOVATION: INSPIRATIONAL PRACTICES

SUPPORTING PEOPLE THROUGHOUT THEIR LIVES

58

© European Union, 2015

Teacher giving training course to jobseekers (computer-aided design)

Problem addressed

During the 1990s, Denmark experienced higher levels of

unemployment, reaching a peak of 11% in 1993. This

prompted criticism of the existing government interventions

in the labour market to promote employment, which were

characterised by generous and long-duration unemployment

benef‌its and expensive labour activation policies. In 2002, the

Danish Government began to radically reform the delivery of

public employment services (PES) in the country.

Innovative solution

The Danish Government set in a motion a radical reform of

PES in the country to decentralise responsibility for them at

municipal level. This marked a shi from the former division

of responsibility between the state and municipalities. It

particularly aimed to enable better tailoring of employment

support services to local needs. By placing services at the

municipal level, jobseekers could use one, more easily

accessible, ‘entry point’.

Since the introduction of the reforms, PES centres

have the freedom to cooperate with local partners

and other municipalities in implementing their locally

developed employment strategies. The Danish Agency of

Labour Market and Recruitment (STAR) undertakes the

implementation and evaluation of national employment

policies in Denmark. The STAR supports municipalities to

set ambitious goals and ensures that best practices are

disseminated across the country. The STAR also ensures

public accountability of PES centres.

Key results and benef‌its

Bringing decision-making closer to where problems and

individuals are has had a positive impact on the ef‌fectiveness

of active labour marker policies (ALMPs). Denmark is a

frontrunner in developing ALMPs. Municipalities deliver a vast

range of ALMPs targeted at the local situation.

An example of the impact of decentralisation is the

municipality of Hjørring. Here, the authority’s long-term goal

was to reduce the average amount of time that individuals

spend on public benef‌its in one year. Known as the ‘Hjørring

Method’, a panel of multidisciplinary PES employees identify

Decentralisation of active labour

market policy

Reform of Public Employment Services

Denmark