Essay about Denmark : Globalization and the Welfare State

Words: 915
Pages: 4

DENMARK : Globalization and the Welfare State

Today Denmark is one of the most prosperous countries in the world. Unemployment rates are low. Denmark also has low inflation and a surplus on both balance of payments and public expenditure. The World Economic Forum’s 2008 competitiveness index ranks Denmark in its Top Three world-wide. And the World Transparency Index ranks it as the world champion in non-corruption. Furthermore it should be noted that other international comparisons nominate the Danes as the happiest people in the world! Denmark’s success is so impressive.

However, in the 80s and 90s, as the globalization intensified, some economists were skeptical of the ability of small states like Denmark to navigate world
…show more content…
In the present gloomy economic situation in Australia and United States, the so-called flexicurity model is such a very valuable thing to learn. The labour market policies and economic policies in general are arranged in such a way that everyone who is affected by unemployment quickly moves on and receives supplementary skills, job training or a new job. The main purpose of the intensification of the active labour market policy under the Social Democratic government in the 1990s was to offer terms that were so good that no unemployed people could turn them down, to enforce the availability requirement and to upgrade the qualifications of all the unemployed in order to gear them for new job opportunities. Furthermore, Danish corporate tax is relatively low and the possibilities of depreciation deduc-tions etc. are favourable. A predominant share of government expenditure on welfare is funded through taxes which are paid by the entire population

according to income or consumption, and all groups are guaranteed almost all social rights. And in comparison with the USA, the differences are dramatic – not least regarding inequalities in income distribution. The reason is obvious: while citizens in Denmark with a low income only pay for welfare relative to in-come and spending, the situation is totally dif-ferent in the USA. Wealthy Americans pay very little tax. In return, families have to save a fortune in order to get their children into good universities or pay for