Income support as a safety net for displaced workers in Denmark

Displaced workers cope with the consequences of a job loss very differently depending on the type and generosity of the income support they receive. A well-designed benefit system can minimise the adverse consequences resulting from displacement, without necessarily decreasing the incentive for displaced workers to move quickly back into the workforce. This chapter discusses how well displaced workers are covered by the Danish benefit system, and whether the level of income support is adequate to mitigate their wage losses. Recent reforms have helped maintain the sustainability of the benefit system but further measures are required to adapt it to changing economic conditions and improve the inclusiveness of the system.