Investing in Youth: North Denmark Region

3. Connecting young people in North Denmark Region with jobs and education

3.1. Active labour market policy in Denmark

3.1.1. Denmark has a decentralised activation policy set-up

Denmark organises its active labour market policies (ALMPs) through a decentralised structure with significant autonomy for the local level (OECD, 2021[1]). The Ministry of Employment has the overall responsibility for employment policy and is supported by the Danish Agency for Labour Market and Recruitment (STAR), an executive government agency under the Ministry, for the formulation, legislation, and monitoring of its employment policy. However, it is the 98 municipalities in Denmark that are individually responsible for the implementation of ALMPs, including deciding the finer details of ALMP design and processes as well as budget and financing sources for ALMPs.

Each municipality operates its own Job centre, which is tasked with providing services and measures to unemployed people, including job counselling, activation programmes, and job matching. Job centres work closely with local businesses, educational institutions, and social partners and have significant autonomy to tailor programmes to local labour market conditions and the specific needs of their residents. Municipalities can also decide to leave certain tasks to other public entities or private companies, which must comply with the same rules that apply to Job centres. While municipal councils have significant scope to determine municipal taxes to finance their ALMP expenditures, they face strong financial incentives to provide effective ALMPs because of an established accountability framework (European Commission, 2018[2]). More specifically, the government covers the social benefits municipalities pay to a jobseeker, but reimbursements paid to municipalities decrease as a person receives social benefits for longer.

3.1.2. The Youth Guarantee is well-established in Denmark

In line with the Youth Guarantee initiative of the European Commission introduced in 2013 and reinforced in 2020, the Danish Ministry of Employment developed an implementation plan for the Youth Guarantee in Denmark. The plan focused on three main aims: 1) integrating young people without education into the regular education system; 2) giving young people without the basic skills for entering education support to be able to join the regular educational system; and 3) getting young people with an education into employment (Ministry of Employment, 2014[3]). Danish youth policies focus on early intervention and activation and a range of benefits support young people in different situations. The Youth Guarantee in Denmark is implemented through a partnership approach with inputs from Job centres, municipalities, educational institutions, youth guidance centres, production schools, youth units, unemployment insurance funds, social partners, and others (European Commission, 2020[4]).

Overall, the European Youth Guarantee initiative has had limited direct influence in Denmark, in the first place because youth unemployment has always been rather low in Denmark compared with other European countries, which implied that Denmark was not eligible for special Youth Guarantee funds of the European Commission. Job centres could still use funding from the European Social Fund to implement innovative measures targeting youth unemployment, which has indeed been the case for a couple of programmes over the past decade, including support for young people in disadvantaged situations, training and support initiatives for entrepreneurship, and improvement of vocational and further education among others. The second reason was that Denmark already had well-established policy measures for young people and reforms introduced prior to the introduction of the Youth Guarantee already aimed at reinforcing the support available to young people (European Commission, 2020[4]).

In its last assessment, the Employment Committee of the European Commission (2020[4]) noted that the decentralised system and strong partnerships with a range of stakeholders allow for tailor-made offers for young people, with an appropriate mix of measures in the fields of education, social assistance, healthcare, and work. After registration at the Job centre, young people receive a first profiling interview within seven days, which determines the approach taken. If a young person has not completed compulsory education, they are entitled to an activation offer of relevant education, training or employment within the first month and hereafter a maximum of four months between each activation. If a young person has completed compulsory education, they are entitled to receive a quality offer of relevant activation, training, or employment within three months. The Employment Committee also noted that comprehensive and effective monitoring is in place in Denmark. However, the Committee expressed concerns over the outreach to inactive unregistered NEETs who do not receive any benefits and the increasing share of early leavers from education and training. School dropout is indeed a bigger issue in Denmark compared with many other EU countries and has actually gotten worse over the past decade. Between 2013 and 2023, the share of 18‑24 year‑olds leaving education and training early rose from 8.2% to 10.4% in Denmark, compared to an EU27 average of 9.5% in 2023 (Figure 3.1). The Employment Committee of the European Commission invited Denmark to undertake more efforts to improve support for these groups (European Commission, 2020[4]).

Figure 3.1. One in ten 18‑24 year‑olds leave education and training early in Denmark

Share of 18‑24 year‑olds who have at most lower secondary education and who are not enrolled in any education or training, 2013 and 2023

Source: OECD tabulation based on Eurostat data on early leavers from education and training (Eurostat, 2024[5]).

3.1.3. Denmark has high spending on active labour market policy

Expenditure on active labour market policies in Denmark is amongst the highest in the OECD (Figure 3.2). In combination with its low unemployment rate, Denmark is the country with the highest spending on ALMPs per unemployed person (Lauringson and Lüske, 2021[6]), at 57% of GDP per capita in 2022, far above the level of most other countries and the OECD average of 12% (OECD, forthcoming[7]). High expenditure is the result of the Danish flexicurity approach, a labour market model that combines flexible hiring and firing practices for employers with a robust social security system and strong active labour market policies to ensure high levels of employment security and support for workers. Denmark also puts a lot of effort into the activation of workers with disabilities and reduced work ability through subsidised employment and vocational rehabilitation (Mathisen et al., 2021[8]).

That said, spending on ALMPs has decreased consistently since 2015 in line with the gradual decrease in unemployment and increase in employment and labour force participation overall, both for the total working age population and for young people specifically. There has also been a change in the composition of jobseekers, with a halving in the number of jobseekers close to the labour market between 2010 and 2022 and a slight increase in the number of jobseekers further from the labour market (Ministry of Employment, 2024[9]). The Danish Government intends to further reduce ALMP spending in the coming years by reforming employment initiatives and Job centres (Ministry of Finance, 2024[10]).

Figure 3.2. Denmark spends a higher amount on active labour market policy than most other OECD countries

Expenditure on active and passive labour market policies as a percentage of GDP in Denmark and OECD countries, 2022

Notes: ALMPs stands for Active Labour Market Policies and GDP for Gross Domestic Product. OECD is an unweighted average of the countries covered in the OECD/EC Labour Market Programme Database for each variable. Active programmes contain programmes in category 1‑7, while passive measures contain measures in category 8‑9.

Source: OECD/EC Labour Market Programme Database, https://doi.org/10.1787/data-00312-en.

3.2. The role of Job centres in North Denmark Region

3.2.1. Characteristics of young people registered with Job centres

Young people aged 15 to 29 accounted for one-fifth of the Job centres’ caseload in the North Denmark Region in October 2023. The shares range between 14% and 18% in the different municipalities, only Morsø and Aalborg have a much younger caseload, with the youth cohort representing respectively 26% and 27% of Job centre clients (Figure 3.3, Panel A). More than half (58%) of the youth cohort in the North Denmark Region aged 25 to 29 years, while the youngest cohort, aged 15‑19, accounts for only 8% (Figure 3.3, Panel B). Morsø, Brønderslev, and Rebild have the highest shares of 15‑19 year‑olds registered at the Job centre, and Aalborg and Hjørring have the highest shares of 25‑29 year‑olds.

Figure 3.3. One-fifth of Job centre clients in the North Denmark Region are young

Source: OECD calculations based on administrative data provided by the municipal Job centres in the North Denmark Region.

There is an equal gender division among young people at the Job centre in the North Denmark Region, unlike for all age groups together where women are over-represented (55%) (Figure 3.4). Looking at the youth subgroups registered with the Job centres, there are considerably more male than female in the age group 15‑19 (59% versus 41%), while the opposite is true (though to a much lesser extent) for the older youth group (49% versus 51%). The municipality Rebild has a particularly large share of young men in the age group 15‑19 (79%) and Brønderslev has the highest female share in the oldest youth group (59%).

Comparing this information with the data presented in Chapter 2, which illustrated that the gender gap in the North Denmark Region is particularly large in the age cohort 25‑29, suggests that female NEETs aged 25‑29 are often not registered with the Job centre. Also in the youngest age cohort, where there is no gender gap in the NEET rate, young men seem more likely to register than young women.

Figure 3.4. There is an equal gender division among youth Job centre clients

Gender composition among 16‑29 year‑old Job centre clients by municipality, October 2023

Source: OECD calculations based on administrative data from https://Jobindsats.dk.

One explanation of these findings could be care responsibilities. Calculations based on the EU Labour Force Survey show that more than a quarter of NEETs in Denmark give care responsibilities as the main reason, mostly among women (data are not available for the North Denmark Region). Some municipalities in the North Denmark Region also offer benefits to parents to care for their (young) children at home, on the condition that they have no labour income (Box 3.1). Unlike other parental benefits (like maternity leave or parental leave) where the parent keeps their employment contract while temporarily staying at home to care for their children, the care payments offered by municipalities disconnect parents from the labour market, with potential negative long-term effects on the parent’s labour market attachment.

Box 3.1. Parental care benefit in the North Denmark Region

Several municipalities in the North Denmark Region offer benefits to parents to take care of their (young) children at home (Tilskud til pasning af egne børn or Hjemmepasningsordning). Parents are not allowed to have labour income, though they can take unpaid leave in case they are working. The provision of these benefits is a municipal decision, and eligibility criteria differ slightly across municipalities (Box 3.1). Parents can typically receive such benefit for up to one year, for children under age six (though the upper age limit varies considerably across municipalities). One‑fourth to one‑third of the beneficiaries are under age 30 and over 90% are women.

Table 3.1. Parental care benefit in the North Denmark Region

	Aalborg	Hjørring	Mariagerfjord	Rebild	Thisted
Duration	8 weeks – 1 year	8 weeks – 1 year	Max. 1 year	6‑10 months	8 weeks – 1 year
Maximum age child	3 years	5 years	3 years	3 years	5 years
Benefit amount (per month)	EUR 871	EUR 965 (child aged 0‑2) EUR 707 (child aged 3‑5)	Not offered in 2024	EUR 1 001	EUR 887 (child aged 0‑3) EUR 602 (child aged 3.1‑6)
Number of recipients (under age 30)	307 (107)	90 (20)	67 (30)	43 (10)	50 (15)
Percentage of women among recipients	93%	-	99%	99%	96%
Number of female NEETs 15‑29	2 663	749	503	249	409
Female recipient share among all female NEETs 15‑29	3.7%	2.7%	5.9%	4.0%	3.5%

Source: Information provided by municipal authorities.

3.2.2. Duration of registration with the Job centre

About half (53%) of all young people have been registered with a Job centre in the North Denmark Region for maximum one year (Figure 3.5). The share of those registered for maximum 24 weeks (6.5 months) stands at 38%. Thisted and Aalborg are the two municipalities with the highest share of such short-term youth clients. Mariagerfjord and Morsø have the highest share of long-term youth clients, with respectively 59% and 65% of youth clients who have been with the Job centre for more than one year. The shares in these two municipalities are considerably above the region’s average of 47% of long-term Job centre clients.

Figure 3.5. Half of all young people have been registered with the Job centre for maximum 6.5 months

Distribution of Job centre clients aged 16‑29 by duration of registration at the Job centre by municipality, October 2023

Note: The duration reflects the total duration that a client has been registered at the Job centre, even if the client has switched benefit during the registration period. The duration categories available on Jobindsats.dk are measured in weeks for the first year, with the category 0‑2 months covering 0‑8 weeks; 3.5‑6 months covering 9‑16 weeks; and 6.5‑12 months covering 27‑52 weeks.

Source: OECD calculations based on administrative data from https://Jobindsats.dk.

3.2.3. Classification of jobseekers

To decide which support to select for their young clients, Job centres in Denmark classify them either as job/education-ready or as activity-ready. Job/education-ready clients are deemed to have no work-hindering problems and are required to actively search for a job or return to education. Activity-ready clients, instead, are assessed to have problems that hinder their work participation (e.g. health issues or significant social challenges). They have no job search requirements but are required to participate in activation measures with the purpose of making them “job-ready”. In official labour market statistics, job/education-ready clients are considered unemployed, while activity-ready clients are classified as inactive and are thus not part of the labour force.

Nearly three‑quarters (72%) of young people registered with a Job centre in the North Denmark Region are considered job/education-ready, compared to 81% of the total population (Figure 3.6). Regional differences are substantial. In Vesthimmerland, barely half (54%) of all 15‑29 year‑olds are considered job/education-ready, compared to 81% in Thisted. The difference in classification between both municipalities occurs for all sub age groups of young people, though not for the total population. Morsø, Mariagerfjord, Frederikshavn/Læsø and Brønderslev are other municipalities where a relatively low share of young people is considered job/education-ready, while the share in Aalborg is close to that in Thisted.

Figure 3.6. Three‑quarters of young people are considered job/education-ready

Share of people registered with a Job centre in the North Denmark Region who are considered job/education-ready by age and municipality, 31. October 2023

Source: OECD calculations based on administrative data provided by the municipal Job centres in the North Denmark Region.

Overall, there is a strong correlation between the share of job-readiness and the education level among 15‑29 year‑olds in a municipality: the higher the share of low educated young people in a municipality, the lower the share of young people classified as job ready and the higher the share of high educated young people in a municipality, the higher the share of young people classified as job ready. There is also a strong positive correlation between the share of job-ready young people and the development of the municipal labour market between 2017 and 2020: a higher share of young people is classified as job-ready in municipalities where the number of jobs increased over that period.

Especially among the youngest age cohort (i.e. 15‑19 years), very few are considered job/education-ready (31% on average across the Northern municipalities), suggesting that two‑thirds of the youngest cohort have substantial issues that hinder their participation in education or work. Nevertheless, there are strong variations across regions, ranging from only 15% in Vesthimmerland to 54% in Thisted and 71% in Jammerbugt.

Exploring the available data further reveals that most young people registered at the Job centre for less than six months are classified as job/education-ready: 88% on average across the Northern municipalities (Figure 3.7). It should indeed be easier to find a job or return to education for those who are considered job/education-ready, hence limiting the time this group remains registered with the Job centre. In contrast, two out of three young people who have been registered with the Job centre for more than one year are considered activity-ready. For this group with considerable barriers to employment, it is not unusual to stay unemployed for a longer period of time as their labour market integration requires more time when health, social or care barriers need to be addressed.

Figure 3.7. Two in three young people registered for over a year are classified as activity-ready

Share of 15‑29 year‑olds registered at the Job centre by readiness status and duration with the Job centre, 31. October 2022

Note: Total refers to North Denmark Region.

Source: OECD calculations based on administrative data provided by the municipal Job centres in the North Denmark Region.

The question should then be asked, why the remaining third of long-term registered, i.e. those considered as job/education ready remain registered for so long. There is relatively little variation across municipalities in the size of this group, ranging from 23% in Morsø to 38% in Thisted; the only outlier is Hjørring where half of all long-term registered young people in the age group 15‑29 are considered job/education ready. Discussions with Job centres suggest that it is very difficult to move people from an activity-ready status into a job/education-ready status as the benefits people in the former group receive are considerably higher (currently the difference in the monthly rate is DKK 5 500 (EUR 738), but the difference will decrease with the new unemployment benefit reform (scheduled for July 2025) to DKK 1 000 (EUR 134) per month for 18‑24 year‑olds who are not caregivers and to DKK 2 500 (EUR 336) per month for 18‑24 year‑olds who are caregivers and for 25‑29 year‑olds regardless of caregiving status). It is therefore better for Job centres to classify young people as job/education ready even if they have some challenges that need to be addressed as it will enhance their chances for labour market integration.

3.2.4. Benefit schemes for young people

The largest group of young people registered with the Job centres receive educational benefits (41%), another 32% receive unemployment benefits, while only 2% receive cash benefits (Figure 3.8, Panel A) – the remaining 25% receive other type of benefits as displayed in Panel B (see below for discussion). These shares are substantially different from the shares for the total population, for whom educational benefits play a very small role and other benefits a much bigger role. There is some variation across municipalities, with a stronger focus on educational assistance in Mariagerfjord (55%) and much less so in Hjørring (37%) and Aalborg (38%). While Aalborg has more young people on unemployment benefits, Hjørring makes more frequently use of other types of assistance (see discussion below).

Figure 3.8. Four out of ten young people receive education benefits

Note: Data split by municipality refers to the age group 15‑29 year‑olds. The category “Other” in Panel A covers sickness benefits and extensions, resource allowances and flexi-jobs. The respective shares of these benefits are shown in Panel B. Pink bars refer to the weighted average of the North Denmark Region.

Source: OECD calculations based on administrative data provided by the municipal Job centres in the North Denmark Region.

The youngest cohort (aged 15‑19) almost exclusively receives education benefits, covering 94% of all Job centre clients in this age range across municipalities in the North Denmark Region. This observation is in line with the strong focus of the Danish Youth Guarantee on educational achievement for people with lower qualifications. Young people between 15 and 17 who have not completed education are tracked and monitored at the municipal level, to ensure that they integrate into the educational system as soon as possible in order to conclude vocational education or upper secondary education (Ministry of Employment, 2014[3]). If the young person does not meet the preconditions for entering an educational path, a specific support will be provided for preparing them to complete their education.

For the oldest youth cohort of Job centre clients, aged 25‑29, four out of ten (41%) have accumulated unemployment insurance rights and receive unemployment benefits. This share is even higher than for the total population where only 23% receives unemployment benefits. However, in some municipalities, this share is considerably lower for the 25‑29 cohort: 20% in Morsø and 24% in Vesthimmerland, suggesting a more difficult school-to-work transition and fewer young people with work experiences. These two municipalities also have a large share of young people in the age cohort 25‑29 years receiving education benefits, at respectively 34% and 33% compared to an average of 26% across the North Denmark Region, indicating a particularly low educated youth cohort in this area (see Chapter 2). Indeed, young people receive education benefits only when they have not obtained upper-secondary or vocational education.

Denmark has several other types of benefit schemes in place, allowing municipalities to keep more people attached to the labour market: resource allowances, flexi-jobs, and sickness benefits (see Box 3.2 for an overview of the benefit types available for young people in Denmark). The resource scheme is an interdisciplinary vocational rehabilitation programme that aims to identify and develop the work ability of people at risk of disability pension and lasts for up to 5 years. Since 2013, people under age 40 are no longer granted disability pension unless it is evident that their work ability cannot improve. The eligibility criteria for flexi-job were also loosened, allowing people with the ability to work only a few hours per week to be granted a flexi-job if they have prospects to increase their work hours over time (Mathisen et al., 2021[8]).

On average across North Denmark, 14% of 15‑29 years old receive sickness benefits, compared to 25% of the total population (Figure 3.8, Panel B). The shares range from 11% in Aalborg and Mariagerfjord to 24% in Jammerbugt, rising with each age cohort. Most municipalities in North Denmark have around 6‑8% of 15‑29 year‑olds participating in resource schemes, with on the lower end Thisted (2%), Jammerbugt (3%) and Aalborg (4%) and on the higher end Morsø (12%). Similar shares of young people participate in flex-jobs (5‑9% of 15‑29 year‑olds), except in Morsø and Hjørring where respectively 12% and 14% of all young people who are registered with the municipality’s Job centre make use of flexi-jobs. Such arrangements are used much more often for the total population, at 27%.

Box 3.2. Benefit types for young people in Denmark

Unemployment benefit. All unemployed persons who are insured through an unemployment insurance fund have the right to receive unemployment benefits.

Cash benefit. An unemployed person above 18 years can receive a cash benefit if they are not eligible for unemployment benefit, and they are not able to provide for themselves.

Education benefit. All young unemployed persons below 30 years old without an upper-secondary or vocational education diploma, receive an education benefit instead of a cash benefit. The rate corresponds to the state educational grant and loan scheme rate for higher education, which is lower than cash benefit.

Resource allowance. The resource allowance is offered to individuals who are at risk of being put on sickness benefits and participate in a resource scheme. The scheme is designed to develop their ability to work or participate in education or training. A resource scheme can last from one to five years, and beneficiaries have the right to receive a resource allowance as long as they take part in the activities outlined in the rehabilitation plan.

Flexi-jobs. People in this scheme work a reduced number of employer-paid hours according to their work ability and the remaining income is subsidised by the government up to a certain threshold.

Sickness benefit. People who are unable to work due to illness or injury receive a sickness benefit. Sickness benefits last for a maximum of 22 weeks within a 9‑month period but can be extended under certain conditions. The sickness benefit is accompanied with a job assessment that determines the need for a resource scheme, a flexi-job, or rehabilitation measures to help people back into work.

3.2.5. Active labour market policies for young people

Active labour market policies for young people offered by municipalities in the North Denmark Region can be grouped into four different categories: guidance and upskilling, company internships and wage subsidies, mentor support, and resource courses (see Box 3.3 for more details). On average across the ten municipalities for which data are available, guidance and upskilling support is most frequently used: 64% of all ALMPs offered to 15‑29 year‑olds are guidance and upskilling (Figure 3.9, Panel A). In most municipalities, guidance and upskilling account for more than two‑thirds of ALMPs offered to young people, though in Vesthimmerland, Rebild, and Jammerbugt the shares are considerably lower.

Box 3.3. Activation support for young people

• Guidance and upskilling: These measures can consist of brief guidance and clarification activities, ordinary education (e.g. adult education, vocational education, and apprenticeships), and training (certified informal educational institutions, specifically arranged projects and training periods). There are no duration restrictions for guidance and upskilling, and the young person continues to receive a benefit during the process.

• Company internships and wage subsidy: These measures provide jobseekers the opportunity to improve their professional and social competences. Jobseekers continue to receive a benefit for the duration of their internship. An internship can last up to four weeks (or longer for young people further away from the labour market) and should be combined with or followed by paid hours, to the extent possible. Wage subsidies (both in the private and the public sector) are provided to employers when they hire a person who has been unemployed for at least six months, and for a period of 4 or 12 months depending on the category of unemployment the jobseeker belongs to.

• Mentor support: To promote a person’s ability to obtain or maintain activities, ordinary education, or employment, mentor support may be granted for a maximum period of six months, with a possible extension for another six months. The mentor function can be carried out by a private company, an educational institution, or a municipality.

• Resource courses: Resource courses include rehabilitation for people with limitations in their ability to work and support for people who have complex problems in addition to unemployment that have not been solved through other efforts and who require a holistic process with a combination of social or health-related efforts. Resource courses must be organised so that the course can be completed in as short a time as possible and within a maximum of five years (extension is possible in certain circumstances).

Source: Act on Active Employment Efforts.

Figure 3.9. Guidance and upskilling are the most popular active labour market policies for young people

Source: OECD calculations based on administrative data provided by the municipal Job centres in the North Denmark Region.

A recent report by a Danish expert group concludes that there are generally positive employment effects from counselling (Ministry of Employment, 2024[9]), a finding that is confirmed by the academic literature, which suggests that client services, like information services and case management, tend to be the most efficient (in terms of effectiveness and costs) form of ALMP expenditure (Brown and Koettl, 2015[11]; Card, Kluve and Weber, 2018[12]; Dar and Tzannatos, 1999[13]; Kluve, 2010[14]). While the Ministry of Employment (2024[9]) is less optimistic about current training efforts in Denmark (the report is not on young people specifically), a recent OECD report on Nordic Lessons for an Inclusive Recovery (OECD, 2023[15]) noted the importance of training interventions in addressing barriers to employment and improving the competencies of individual jobseekers. Evaluations of a Danish upskilling programme targeted at low-educated young people (Bridges to Education) also showed significantly positive effects in the short and long run to bring more young people into education and eventually into employment (Görlich et al., 2015[16]; Rosholm and Mikkelsen, 2020[17]).

Young people (only those with an upper secondary education diploma) in Denmark can also be offered traineeships, wage subsidies, on-the‑job training, job-rotation, or public works. The focus is on creating on-the‑job opportunities rather than on creating job positions. Examples include training contracts with an enterprise, hands-on work experience in a company, or other types of work experience to improve skills. None of these contracts foresee an obligation for the employer to hire the trainee at the end of the scheme/subsidy, but the Danish expert group notes that there are generally positive employment effects from private wage subsidies, both for job-ready Job centre clients and activity-ready clients (Ministry of Employment, 2024[9]).

Company internships and wage subsidies are the second most popular ALMP support, accounting for 27% of all ALMPs offered to young jobseekers across North Denmark Region (Figure 3.9, Panel A). The share of company internship and wage subsidy gradually increases with the time young people are registered with the Job centre: 14% among those registered for 0‑3 months, up to 34% for those who have been registered for more than three years (Figure 3.9, Panel B). Vesthimmerland and Jammerbugt are the two municipalities that offer most often company internships and wage subsidies to their young clients, accounting for 41% of ALMPs for young people.

Four municipalities heavily invest in mentor support: Vesthimmerland (24%), Hjørring (18%), Rebild and Morsø (both 10%) (Figure 3.9, Panel A). The municipality Rebild also has a strong focus on resource courses (18%), and to a lesser extent Frederikshavn/Læsø (10%), Hjørring (5%), and Thisted (4%). Mentor support seems to be particularly effective for young people in vulnerable situations, as shown by a randomised controlled trial carried out by the Danish Agency for Labour Market and Recruitment (STAR) in the mid‑2010s, with positive effects both on starting education and entering employment (Svarer et al., 2014[18]).

3.2.6. Exit from Job centre caseload

Each quarter, around one in five young people leave the Job centre for employment or education in the North Denmark Region. Data for the first quarter of 2022 show that 17% of young people are in employment one month after their last benefit receipt and another 3% are in education (Figure 3.10, Panel A). Only 2% have left for inactivity and the rest (77%) are still registered at the Job centre. Exit to employment is highest in Aalborg with 20% and lowest in Morsø with 8%, all other municipalities are close to 15%.

Exit to employment is largest for young people on sickness benefits, reaching 86% in the first quarter of 2022 for the North Denmark Region (Figure 3.10, Panel B), which suggests that such benefits are mostly used for young people who experience a temporary illness or injury without any major consequences for their labour market integration afterwards. Also, among unemployment benefit recipients, 35% leave for employment every quarter, whereas the shares are much lower for young people receiving cash benefits and resource allowances, indicating their often more challenging barriers to employment. The low share of young people on education benefits leaving for education is contradictory at first sight, however, it can be explained by the fact that these young people remain registered with the Job centre as long as they are receiving education benefits. The category “Remain at Job centre” therefore means that they are currently in education, while the category “Exit to education” covers those who continue their education without financial support from the Job centre.

These exit patterns are also reflected in the case duration for youths registered at the Job centre. Among all youths receiving unemployment benefits, 72% have been at the Job centre for less than 24 weeks (6.5 months) and among those on sickness benefits 58% have had such a short case duration (Figure 3.11). Youths receiving cash benefits or resource allowance benefits on the other hand have been at the Job centre for more than one year in 57% and even 98% of all cases respectively, again highlighting their more severe barriers to employment.

Figure 3.10. Each quarter, one in five young people leave the Job centre for employment or education

Status one month after last benefit receipt for young people aged 16‑29, by municipality and benefit type, Q1‑2022

Note: Panel A computes the share of young people who left the Job centre during the first quarter of 2022 as a share of all registered at the Job centre during the first quarter of 2022, split by the status one month after leaving the Job centre. Panel B computes the share of young people who left the Job centre during the first quarter of 2022 as a share of all registered, by last benefit type and status one month after leaving the Job centre.

Source: OECD calculations based on administrative data from https://Jobindsats.dk.

Figure 3.11. Around 6 in 10 youths on unemployment benefit or sickness benefit have been at the Job centre for a maximum of 6.5 months

Distribution of Job centre clients aged 16‑29 by benefit and duration of registration at the Job centre, October 2023

Note: The duration reflects the period a person has spent on a given benefit, not the total amount of time a client has spent at the Job centre in case a client switched benefits.

Source: OECD calculations based on administrative data from https://Jobindsats.dk.

Among the young people who have left the Job centre in 2022, 75% are still in employment six months later and 14% are in education, about 6% are back at the Job centre and 4% are in activity. The shares are very similar after 12 months, with still 69% in employment and 15% in education, and 10% back at the Job centre. There is very little variation across municipalities, both in the status after six months and in the status after 12 months.

Focusing on the ALMPs that lead to employment or education within six months reveals large differences across municipalities. While in Rebild and Morsø more than 50% of those who left the Job centre successfully participated in a company internship or benefitted from wage subsidies, the share is less than one in four in Thisted and Aalborg (Figure 3.13, Panel A). In these two municipalities those who participated in guidance and upskilling are most likely to leave the Job centre into employment or education. While mentor support is offered across municipalities (ranging from 1% of all registered young people in Mariagerfjord to 24% in Vesthimmerland, see Figure 3.9), it seldom leads to employment/education six months later. Interviews with municipalities confirmed that it can be difficult to retain young people in regular employment after the mentoring scheme. Similar findings hold for resource courses, none of the young people who moved into education/employment within six months are reported to have participated in such activation measure. It is important to note that these numbers do not directly reflect the success of a given ALMP as various other factors may also play a role. For example, the group of job seekers who participate in a given ALMP is likely different across ALMP and municipalities, also contributing to differences in success rates.

Panel B of Figure 3.13 suggests that it may take longer than six months for an ALMP to lead to employment/education. While about one‑third of young people who participated in guidance and upskilling is in employment/education after six months, half of all participants are still with the Job centre, and only few have left. Similar findings hold for company internships and wage subsidies: 56% are at the Job centre six months later. This finding could also suggest that it remains difficult for young people to transition from an internship/subsidised job into unsubsidised employment, an observation that is confirmed by interview with Job centres in the North Denmark Region for the purpose of this report (see next section). Finally, unsuccessful exits are virtually zero for the resource courses, indicating that while young people might take longer to find employment or education when participating in such an ALMP, they are less likely to drop out into inactivity. Since resource courses are offered to people with more severe challenges, it is not surprising that exit to education or employment is nihil within six months. In addition, and as mentioned above, differences across ALMPs are not necessarily a reflection of their relative success rates as outcomes are influenced by the composition of a group taking a particular ALMP as well as many other factors.

Figure 3.12. Nine out of ten young people are still in employment or education six months after leaving the Job centre

Status 6 and 12 months after last benefit receipt for young people aged 16‑29, by municipality, 2022

Note: Panel A computes the share of young people who left the Job centre during the first quarter of 2022 as a share of all registered at the Job centre during the first quarter of 2022, split by the status six months after leaving the Job centre. Panel B does the same but after 12 months.

Source: OECD calculations based on administrative data from https://Jobindsats.dk.

Figure 3.13. One in three participants of guidance and upskilling programmes are in still employment or education six months after leaving the Job centre

Note: The data cover 15‑29 year‑olds who participated in one of the four ALMPs reported in the figure.

Source: OECD calculations based on administrative data provided by the municipal Job centres in the North Denmark Region.

3.2.7. Focus on young people in a vulnerable situation

Despite the range of ALMPs that the Job centres have at their disposal, all municipalities that were consulted for this report indicate that there is a group of particularly vulnerable young people who remain difficult to integrate in the labour market. These young people face considerable challenges, most if not all related to mental health issues of various kinds and resulting additional challenges (such as low education, behavioural issues, low self-esteem, etc.). To help them into jobs, a lot of time and energy as well as creativity is required from the Job centre staff and other municipal case workers.

In the mid‑2010s, Denmark reformed its disability pension system and flexi-job scheme with the aim to increase work ability of persons with disability. The eligibility criteria for disability benefits were tightened and persons under 40 years could no longer be granted access unless it was evident that their work ability could not be improved. A new interdisciplinary vocational rehabilitation programme called “resource scheme” was introduced and the eligibility criteria for flexi-job were loosened to allow persons who had the ability to work only a few hours per week access to flexi-jobs. The reform resulted in a halving in the probability of being awarded a disability pension and a gradual increase in the number of flexi-jobs (Mathisen et al., 2021[8]). Another study found that employment rates increased but only among the more healthy ones, while more people were receiving social assistance or no benefits at all (Jensen et al., 2019[19]).

In response to these reforms, several municipalities decided to invest heavily in ALMPs targeted at disadvantaged groups (of any age), with a focus on social assistance recipients. Additional investment primarily focused on reducing the caseloads of Job centre staff and allocating additional activation resources. An evaluation of the investment efforts in Hjørring municipality by Ravn and Nielsen (2019[20]) reveals that there was a significant increase in the intensity of activation, measured as the share of activity-ready social assistance recipients who participated in ALMPs in a given week and the average number of weeks they participated in ALMPs on a yearly basis. The investments resulted in an increase in the number of hours worked among Job centre clients, both those with a shorter and a longer history of benefit receipt.

Individual Placement and Support (IPS), an evidence‑based yet expensive practice that helps individuals with mental disorders find and keep competitive employment, is frequently used in the North Denmark Region. Seven out of the nine municipalities in the North Denmark Region that were consulted for this report apply IPS in their Job centre; two municipalities explicitly mentioned that they do not have an IPS. The IPS approach offers intensive, individually tailored support to help people find paid jobs within weeks of being referred to the service and Job centre staff continue to work with both the employer and their client to sustain the job placement for as long as possible, or to help them into a different job if needed. IPS integrates both employment specialists and health specialist teams to offer integrated support.

A series of randomised controlled trial evaluations of the IPS model in Denmark, summarised in Christensen, Hellström and Eplov (2023[21]), show that the IPS approach lead to improved employment and education outcomes, both in the short and long run, among people with serious mental illness who have a desire to work or study. They were also significantly more satisfied with the support they received than the treatment group.

The key role that municipalities in Denmark play in social and labour market policy offers unique opportunities for further integration of services. Some municipalities in the North Denmark Region have indeed merged different services for young people in a one‑stop shop set-up, like for instance Ung-Mors (Young-Mors) in the municipality of Morsø. This new organisation, in place since January 2024, includes lower secondary education, youth and education counsellors, pedagogical psychological counsellors, representatives of the Centre for Children and Families, crime prevention counsellors, and Job centre counsellors. The one‑stop shop operates closer to the school and the environment of young people, and not in the Job centre offices, which tend to create slightly more distance.

A reform commission appointed by the government to explore ways to improving support for people (young people and adults) with complex challenges presents a series of detailed recommendations in their report “New Reform Path 3” (Reform Kommissionen, 2023[22]). The report also describes a wide range of initiatives that are being explored by municipalities in Denmark, including ways to reduce bureaucracy for collaboration across municipal stakeholders, employment efforts that focus on both jobs and social inclusion, competence building among case workers, partnerships with companies and civil society, and many others.

However, additional attention and targeted efforts will need to be devoted to addressing mental health issues, which are identified as one of the most important challenges for Job centres in the activation of young people. While most municipalities have hired psychologists to support youth case workers in their work and provide a few sessions of psychological treatment, they cannot provide in-depth psychological or psychiatric treatment. The shortage of specialised psychologists and psychiatrists in regional psychiatry leads to long waiting times for diagnosis and treatment, thus hindering the work of Job centres when they are trying to improve the work capacity of young people with mental health issues.

The OECD report Mental Health and Work: Denmark (OECD, 2013[23]) highlighted that the biggest challenge for mental health care in Denmark is the disconnection between health services (a regional task) and social and employment services (a municipal task). While investments in mental health services are crucial to expand capacity, even more important is the integration of health services with social and employment services. Indeed, a recent study by VIVE (2024[24]) shows that easier access to psychological support by itself has very few and small effects on people’s attachment to education and the labour market. Evaluations of the IAPT programme in the United Kingdom (with IAPT standing for Increasing Access to Psychotherapeutic Treatment) corroborate the Danish finding: increased access to psychotherapeutic treatment alone has only a minor impact on subsequent employment while integrated mental health and employment support improves both mental health and the likelihood of entering the labour market (Box 3.4).

Box 3.4. Collaboration between employment advisors and psychological therapists in the United Kingdom

People with mental disorders often suffer from a combination of medical, social, and work-related problems requiring services and support from a range of different actors. Yet health policies and services tend to operate in isolation from other systems and often focus on people with severe disorders.

To provide integrated employment and health services, the United Kingdom’s National Health Service introduced Employment Advisors in the Improving Access to Psychological Therapies (IAPT) programme. IAPT offers fast access to evidence‑based psychological treatment for people with a common mental disorder. The Employment Advisors work alongside IAPT therapists, providing practical advice and relevant intervention to help people remain in work or enter the workplace. Access to IAPT services is by self-referral or referral from general practitioners. Employment Advisors give added value to IAPT services both by facilitating quicker return-to-work from sick leave and increasing the likelihood of remaining in employment.

A recent evaluation shows that the collaboration between Employment Advisors and IAPT therapists has a positive impact for people who were out of work when they entered the programme, both on their mental health and on the likelihood of them entering the labour market, compared to IAPT clients who did not see an Employment Advisor. 26% of clients who had seen an Employment Advisor were working at the end of the programme compared to 21% of those who had not seen an Employment Advisor, and a much higher share (48%) were looking for work than those in the control group (34%), showing that they were ready for the labour market.

Source: OECD (2015[25]), Fit Mind, Fit Job: From Evidence to Practice in Mental Health and Work, and Purdon et al. (2022[26]), Employment Advisers in Improving Access to Psychological Therapies: Evaluation of the impact of Employment Adviser support in Steps2Wellbeing IAPT (Southampton and Dorset), DWP research report no. 1 014, Department for Work and Pensions.

The shortage of psychological/psychiatric support often starts earlier on in a young person’s life already, when they are still in education. A psychiatric diagnosis is necessary to get access to specialised support in education. However, there are insufficient specialised teachers, pedagogues, physiotherapists, etc. in the North Denmark Region to support young people with mental health issues during education. In addition, the number of child and adolescent psychiatrists moving into private practice is increasing and creates social inequality in healthcare, as not everyone can afford to pay for assessments in the private sector.

The OECD (2013[23]) noted in its report on Mental Health and Work: Denmark that while Denmark has sound school-based policies in place to help adolescents with a severe mental disorder, the support for pupils with a mild and moderate and typically unidentified mental disorder is insufficient. The OECD recommended Denmark at that time to invest in strong general school support services that are well connected with the health system, with a larger role and more resources for the municipal educational-psychological advisory services.

All municipalities interviewed for the purpose of this report are satisfied about the collaboration with companies and their efforts to offer jobs to young people with challenges. All Job centres have a close collaboration with employers and in general find sufficient companies willing to employ young people in a vulnerable or disadvantage situation. Some of the municipalities organise trainings for companies several times per year on how to engage with young people with difficulties. The most important challenge for companies (and for the Job centre staff accompanying the companies) is absences. Young people who face significant challenges struggle to keep their commitments and show up at work, for instance because of their mental ill-health. Various municipalities mentioned interest in further training on how to deal with the attendance issue. Another difficulty that was frequently mentioned by municipalities was the transition from subsidised to regular employment, a finding confirmed by the data show in Figure 3.13.

One issue that several municipalities mentioned during the interviews is the lack of public transport (poor coverage and few connections per day) and the inability for young people to move around. Job centres are typically located in the centre of a municipality and, depending on its size, may be relatively far for some young people. In Danish employment legislation, there are explicit requirements that the citizen must show up at the Job centre to be entitled to help and benefits. Job centre staff therefore do not visit clients, though some municipalities waive this requirement in specific individual situations when it is necessary to help a young person (e.g. a person with social anxiety) and some other municipalities have opened local offices in smaller areas (e.g. Frederikshavn has a local office in Skagen, a town at 40 kilometres’ distance). The initiatives of the French association Wimoov described in Box 3.5 and the mobile labour offices in Bulgaria described in could provide inspiration to tackle mobility barriers (OECD, 2022[27]).

In October 2024, the government reached an agreement to allocate more than DKK 1.3 billion (EUR 175 million) up to 2035 (Ministry of Employment, 2024[28]), which is an excellent opportunity to strengthen initiatives for young people who are neither in education nor employment. The agreement has a particular focus on young people facing complex challenges such as mental health issues and emphasises co‑ordinated, cross-sectoral efforts that will bring together municipalities, businesses, and civil society through a national partnership called “Youth Promise” (Ungeløftet). Key measures include expanding the Individual Placement and Support model to employment, investing in social projects, fostering community inclusion, and enhancing access to vocational and educational opportunities. The agreement also allocates funding for targeted support to prevent crime and assist young people with disabilities. Although the target group of the agreement is young people aged 15‑24 without education or employment, the agreement explicitly mentions that 25‑29 year‑olds or those with education can also benefit from the measures.

Box 3.5. Inclusive mobility initiatives of the French association Wimoov

Wimoov is a French association that organises inclusive mobility initiatives to provide tailored supports to individuals facing mobility-related barriers. The aim of Wimoov is to foster sustainable and autonomous mobility for individuals and improve their access to employment and training opportunities. Wimoov uses a digital tool to generate a personal mobility profile and guide the person to an appropriate service stream. Service beneficiaries are typically referred to Wimoov by external organisations such as Pôle Emploi (the French Public Employment Service) and local level authorities. Wimoov’s services are wide‑ranging, spanning four areas:

• Educational solutions – e.g. mobility training measures for employment, personalised mobility coaching, assistance to learn to drive (or resume driving).

• Financial solutions – e.g. support towards financial aid, access to microcredit.

• Partnership solutions – e.g. training measures for professionals, access to mobility conferences, training measures for enterprises.

• Material solutions – e.g. reduced rates for bike and vehicle rentals, carpooling, car-sharing, vehicle purchases and repairs at reduced rates.

Wimoov has 25 mobility platforms within nine regions of France (both rural and urban areas are covered) and they co‑operate with over 900 partner organisations and more than 100 mobility professionals.

Sources: www.wimoov.org/ and OECD (2022[29]), Good practices in the integration of IT systems and data exchange to support service provision and identification of people in need of support, Unpublished report.

3.3. Conclusions and policy recommendations

Denmark organises its active labour market policies through a decentralised structure with significant autonomy for the local level and has well-established measures for young people in place with a strong focus on early intervention and activation. Each municipality operates its own Job centre, which work in close collaboration with local businesses, educational institutions, and social partners. They also have significant autonomy to tailor programmes to local labour market conditions and the specific needs of their residents.

Young people aged 15‑29 account for one fifth of the Job centres’ caseload in the North Denmark Region, of whom 58% age between 25 and 29. About half (53%) of all young people have been registered with a Job centre in the North Denmark Region for maximum one year. Although there is an equal gender division among young people registered with the Job centres, female NEETs aged 25‑29 are often not registered, most likely because of childcare responsibilities. Also in the youngest age cohort, where there is no gender gap in the NEET rate discussed in Chapter 2, young men seem more likely to register than young women.

Nearly three‑quarters (72%) of young people registered with a Job centre in the North Denmark Region are considered job/education-ready, yet regional differences are substantial. Overall, there is a strong negative correlation between the share of job-readiness and the education level among 15‑29 year‑olds in a municipality: the higher the share of low educated young people in a municipality, the lower the share of young people classified as job ready. There is also a strong positive correlation between the share of job-ready young people and the development of the municipal labour market between 2017 and 2020: a higher share of young people is classified as job-ready in municipalities where the number of jobs increased over that period.

Among young people registered with the Job centres, 41% of receive educational benefits, 32% receives unemployment benefits, 14% receives sickness allowance, and the remaining 14% receives other types of benefits like cash benefit, resource allowance or flexi-jobs. The share receiving unemployment benefits is much smaller in the smaller municipalities and for the younger cohorts, suggesting that young people often have not accumulated sufficient unemployment insurance contributions that would entitle them to receiving unemployment benefits.

Each quarter, around one in five young people leave the Job centre for employment or education and around two‑thirds of young people receiving unemployment or sickness benefits have been registered for less than 24 weeks (6.5 months). Among those who leave the Job centre, 90% are still in employment or education six months later and the share is very similar after 12 months, at 84%. Only 10% return to the Job centre after one year.

Overall, Job centres in the North Denmark Region are quite successful in getting job/education-ready young people into employment or education within a reasonable time. There is, however, a substantial group of young people who have been inactive for more than three years – half of all NEETs in the North Denmark Region – and two‑thirds of them have considerable challenges to enter the labour market or return to education. The Job centres have a large range of activation measures at their disposal and have set up collaborations with local partners to find solutions. Nevertheless, low education and mental ill-health pose significant challenges for municipalities in the North Denmark Region.

Many efforts are currently being undertaken in Denmark to address the challenges in supporting (young) people in vulnerable situations. The analysis in this report contributes to the discussion by highlighting the importance of addressing mental ill-health and low education to improve outcomes for young people. The OECD suggests the following recommendations for the North Denmark Region to lower the NEET rate:

Invest in integrated mental health and employment services. All municipalities interviewed for the purpose of this report mentioned that mental ill-health is the biggest challenge in helping young people into work or education and survey data shows that close to half (46%) of all NEETs exhibit mental health issues. While many municipalities in the North Denmark Region have hired psychologists to support youth case workers in their work and provide a few sessions of psychological treatment, there is a shortage of specialised psychologists and psychiatrists in regional psychiatry and limited integrated mental health and employment support. The long waiting times for diagnosis and treatment hinder the work of Job centres when they are trying to improve the work capacity of young people with mental health issues.

• Address the disconnection between health services and social and employment services by setting up formal collaboration agreements between municipal services and the mental health sector and developing employment-oriented mental health care.

• Increase the capacity of mental health services to address unmet service needs, including more psychiatrist service capacity, specialised nurses, and psychologists.

• Address mental health issues early on, including for mild or moderate (and often unidentified) mental health disorders, by investing in sufficient and integrated resources for the education system and youth mental health services.

Tackle low education. NEET rates in the North Denmark Region are about twice as high among low educated young people than among their more educated peers and low-educated people account for 58% of all NEETs. According to interviews with Job centres, low educated young people have often struggled with low grades throughout their education and have not necessarily received sufficient support, leading to the decision to leave school or not continue education after primary or lower secondary education. School dropout is indeed a bigger issue in Denmark than in many other OECD countries and has worsened in recent years. Collaboration between the education system and Job centre staff exist in in the North Denmark Region but not on a systematic basis.

• Ensure close collaboration between the education system, Job centres, social services, mental health services, and other youth stakeholders in municipalities to identify students at risk of dropping out of education early on.

• Strengthen preventive measures and targeted interventions via mentoring, (mental) health and social support for young people struggling at school.

Avoid that young mothers disconnect from the labour market. Women in their end-twenties are considerably more likely to be NEET than their male counterparts in several municipalities in the North Denmark Region. Comparing different data sources reveal that many of these young women are not registered with the Job centre, suggesting that care obligations might be the main reason for their inactivity. Some municipalities in the North Denmark Region offer payments to parents to care for their (young) children at home, on the condition that they have no labour income. Unlike maternity leave or parental leave where the parent keeps their employment contract, the care payments offered by municipalities oblige parents to disconnect from the labour market, creating potential negative long-term effects on their labour market attachment.

• Investigate the long-term impact of municipal care payments on women’s labour market outcomes.

• If necessary, explore alternative options to support young parents with their care responsibilities.

Improve access to services for people with transportation problems. Lack of public transport has been highlighted as an important issue in many municipalities, especially in the more dispersed municipalities. Poor coverage, few connections, and expensive fees for public transport affect the mobility of people with limited means or limited abilities. Job centres are typically located in the centre of a municipality and, depending on its size, may be relatively far from people’s home. Since there are explicit requirements in the Danish employment legislation that a citizen must show up at the Job centre to be entitled to help and benefits, case workers would typically only attend their clients in the Job centre.

• Consider mobile Job centre units to bring Job centre services closer to people’s homes where necessary.

• Investigate options to address transport challenges, including free public transport for certain age groups and improved coverage, inclusive mobility initiatives to foster sustainable and autonomous mobility for people in collaboration with local associations and mobility professionals, and/or mobility supports/grants to help with the travel cost associated with attending interviews and programmes in Job centres.

Invest in training for youth case workers. Interviews with Job centre staff and other youth policy makers in the different municipalities in the North Denmark Region reveal that little training is provided to case workers responsible for young people. The diverse background of and regular turnover among case workers does not guarantee a continuation in the quality of services and support delivered. The challenges youth case workers are confronted with tend to be common across municipalities and over time: mental health issues, low self-esteem, and motivational issues are the most frequently mentioned challenges for case workers. Dedicated trainings (virtual and in‑person) that can strengthen the knowledge and expertise on how to better deal with these challenges would therefore be welcomed by the municipalities. By joining forces in the development/procurement of such trainings, municipalities could reduce the financial impact of such investment. Joint training sessions, combined with good practice workshops would further stimulate learning across the region.

• Invest in (virtual and in‑person) training programmes to improve the competences of Job centre staff and other people working with young people in municipalities.

• Set up a collaboration across the different municipalities in the North Denmark Region for the development of the training programmes to reduce costs.

• Organise regular workshops to allow case workers to share experiences about working with young people, both good and bad, to stimulate learning across municipalities.

Broaden the target group. The NEET definitions used in Denmark vary from the definition used by the OECD to assess NEET rates, with important implications for the attention devoted to the different aspects of NEET challenges. The most important difference lies in the age groups considered: while the OECD considers young people aged 15‑29, Danish institutions only study the age group 15‑24 (or 16‑24). Since NEET rates across Denmark are highest for the age group of 25‑29 year‑olds, these definitions omit a particularly vulnerable group. The Danish Ministry of Employment further omits young people with a VET or higher education from their definition of NEETs, again neglecting a considerable share of young people who are not in employment, education, or training in the country. Instead, the ministry considers young people working less than 18 hours a week as NEET while the OECD would consider anyone working at least one hour per week as non-NEET. Removing these differences would ensure that important subgroups are considered and improve the comparability of Danish NEET numbers with those reported by other OECD countries. Finally, NEET data reported by Danish institutions currently do not distinguish between those searching for a job (unemployed NEETs) and those who are not (inactive NEETs). As these two groups tend to face different challenges and would require different policy responses, a systematic reporting on both groups would be welcome.

• Include the age group 25‑29 into the Danish NEET definition, to allow for a more careful monitoring of the challenges faced by this group of young people and ensure the development of relevant support programmes and appropriate policy measures.

• Follow the OECD NEET definition more closely by taking into account young people with VET education or above and defining those working any hours per week as non-NEET.

• Systematically distinguish between unemployed and inactive young people who are not in education or training and monitor their trends.

Consider a richer way of measuring success. A group of young individuals registered with the Job centre face significant and multifaceted challenges that limit their capacity to work a substantial number of hours per week. According to the Danish NEET definition, a young person is considered as NEET if they work fewer than 18 hours per week. However, many of these young individuals may never be able to consistently work 18 hours a week, thus perpetually being viewed as “failures” within the system. If working 1, 5, or possibly 10 hours per week is sufficient to keep these young people motivated and socially engaged, then this outcome could be considered a valid end-goal. In addition, positive effects on their mental and physical well-being can generates cost savings in other policy areas, such as healthcare, crime or other.

• Explore alternative success indicators for young people with considerable challenges, including social, health, and well-being measures.

• Measure potential cost savings in other policy areas to obtain a full cost-benefit picture.

Expand the use of admin data to better understand the NEET reasons. Leveraging the rich administrative data that is available in Denmark, further steps could be undertaken to link education and health data with employment and social data (while applying the necessary data protection requirements). Such linked administrative data could help municipalities to better understand the reasons for unemployment and inactivity among young people, identify appropriate support measures and improve service provision. Inspiration could be taken from Estonia’s Youth Guarantee Support System, which combines data from nine input registers and allows municipal case managers to map young people who are not in education, employment or training, reach out to them and, where needed, provide support (OECD, 2023[30]).

• Explore options to link education and health data with employment and social data to give municipalities insights in the reasons why their young people are not in education, employment, or training, to identify appropriate support measures, and to better understand the effectiveness of interventions.

References

[11] Brown, A. and J. Koettl (2015), “Active labor market programs - employment gain or fiscal drain?”, IZA Journal of Labor Economics, Vol. 4/12, https://doi.org/10.1186/s40172-015-0025-5.

[12] Card, D., J. Kluve and A. Weber (2018), “What Works? A Meta Analysis of Recent Active Labor Market Program Evaluations”, Journal of the European Economic Association, Vol. 16/3, pp. 894-931, https://doi.org/10.1093/jeea/jvx028.

[21] Christensen, T., L. Hellström and L. Eplov (2023), Samlet slutrapport for projekt inklusion (Overall final report for project inclusion), STAR, https://star.dk/media/bvdfwvgo/slutrapport-projekt-inklusion.pdf.

[13] Dar, A. and Z. Tzannatos (1999), Active Labour Market Programs: A Review of the Evidence from Evaluations, The World Bank, Washington D.C., http://documents.worldbank.org/curated/en/246161468740363969/Active-labormarketprograms-a-review-of-the-evidence-from-evaluations.

[4] European Commission (2020), Youth Guarantee country by country: Denmark, https://ec.europa.eu/social/BlobServlet?docId=13635&langId=en#:~:text=The%20Danish%20YG%20scheme%20covered,positive%20situation%206%20months%20later.

[2] European Commission (2018), Economic incentives for municipalities to reduce the time it takes to return people to employment, https://ec.europa.eu/social/BlobServlet?docId=19257&langId=en.

[5] Eurostat (2024), Early leavers from education and training, https://ec.europa.eu/eurostat/databrowser/view/sdg_04_10/default/table?lang=en&category=t_educ.t_educ_outc (accessed on 27 September 2024).

[16] Görlich, A. et al. (2015), Hvad virker? Ledige unges vej til uddannelse og arbejde. Evaluering af Brobygning til uddannelse, Center for Ungdomsforskning, Aalborg Universitet, https://star.dk/media/1188/evaluering-af-brobygning-til-uddannelse.pdf.

[19] Jensen, N. et al. (2019), “Too sick to work, too healthy to qualify: a cross-country analysis of the effect of changes to disability benefits”, Journal of Epidemiology and Community Health, Vol. 73/8, pp. 717-722, https://doi.org/10.1136/jech-2019-212191.

[14] Kluve, J. (2010), “The effectiveness of European active labor market programs”, Labour Economics, Vol. 17/6, pp. 904-918, https://doi.org/10.1016/j.labeco.2010.02.004.

[6] Lauringson, A. and M. Lüske (2021), “Institutional set-up of active labour market policy provision in OECD and EU countries: Organisational set-up, regulation and capacity”, OECD Social, Employment and Migration Working Papers, No. 262, OECD Publishing, Paris, https://doi.org/10.1787/9f2cbaa5-en.

[8] Mathisen, J. et al. (2021), “Disability pension among persons with chronic disease: Differential impact of a Danish policy reform”, European Journal of Public Health, Vol. 31/1, pp. 186-192, https://doi.org/10.1093/eurpub/ckaa228.

[9] Ministry of Employment (2024), Anbefalinger til fremtidens beskæftigelsesindsats (Recommendations for future employment efforts), https://fremtidensbeskæftigelsesindsats.dk/media/zxbnsxyy/bm-full_report.pdf (accessed on 10 July 2024).

[28] Ministry of Employment (2024), Broad agreement on youth boost to help young people without education and jobs in work, https://bm.dk/nyheder/pressemeddelelser/2024/10/bred-aftale-om-ungeloeft-skal-hjaelpe-unge-uden-uddannelse-og-job-i-arbejde.

[3] Ministry of Employment (2014), Danish Youth Guarantee Implementation Plan, http://ec.europa.eu/social/BlobServlet?docId=20808&langId=en.

[10] Ministry of Finance (2024), Denmark’s Fiscal and Structural Policy Plan 2024 - Revised version, https://economy-finance.ec.europa.eu/document/download/6139aa30-006e-4691-b8d5-82767718612a_en?filename=Denmarks%20Fiscal%20and%20Structural%20Plan%202024_0.pdf.

[15] OECD (2023), Nordic Lessons for an Inclusive Recovery? Responses to the Impact of COVID-19 on the Labour Market, OECD Publishing, Paris, https://doi.org/10.1787/2aa7bcc1-en.

[30] OECD (2023), Personalised public services for people in vulnerable situations in Lithuania: Towards a more integrated approach, OECD Publishing, Paris, https://doi.org/10.1787/e028d183-en.

[29] OECD (2022), Good practices in the integration of IT systems and data exchange to support service provision and identification of people in need of support, Unpublished report, Paris.

[27] OECD (2022), Reaching Out and Activating Inactive and Unemployed Persons in Bulgaria, Connecting People with Jobs, OECD Publishing, Paris, https://doi.org/10.1787/7b91154a-en.

[1] OECD (2021), Institutional and regulatory set-up of active labour market policy provision in Denmark, https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/employment-services/denmark_almp_institutional_set-up.pdf.

[25] OECD (2015), Fit Mind, Fit Job: From Evidence to Practice in Mental Health and Work, Mental Health and Work, OECD Publishing, Paris, https://doi.org/10.1787/9789264228283-en.

[23] OECD (2013), Mental Health and Work: Denmark, Mental Health and Work, OECD Publishing, Paris, https://doi.org/10.1787/9789264188631-en.

[7] OECD (forthcoming), The role of public employment services in promoting an inclusive Nordic common labour market, OECD, Paris.

[26] Purdon, S. et al. (2022), “Employment Advisers in Improving Access to Psychological Therapies: Evaluation of the impact of Employment Adviser support in Steps2Wellbeing IAPT (Southampton and Dorset)”, DWP research report, No. 1014, Department for Work & Pensions, https://assets.publishing.service.gov.uk/media/6267b1f3d3bf7f55c4df57aa/eas-in-iapt-impact-evaluation.pdf.

[20] Ravn, R. and K. Nielsen (2019), “Employment effects of investments in public employment services for disadvantaged social assistance recipients”, European Journal of Social Security, Vol. 21/1, pp. 42-62, https://doi.org/10.1177/1388262719836797.

[22] Reform Kommissionen (2023), New Reform Paths 3, https://reformkommissionen.dk/udgivelser/nye-reformveje-3/.

[17] Rosholm, M. and M. Mikkelsen (2020), Opdaterede effekter af Brobygning til uddannelse, https://star.dk/media/1149/overordnede-effekter-v1.pdf.

[18] Svarer, M. et al. (2014), Evaluering af mentorindsats til unge uden uddannelse og job, STAR, https://star.dk/media/6995/evaluering-mentorindsats-til-unge-uden-uddannelse-og-job.pdf.

[24] VIVE (2024), Socio-economic effects of increased access to psychological treatment (in Danish), The Danish Center for Social Science Research, Copenhagen, https://www.vive.dk/da/nyheder-og-debat/2024/nemmere-adgang-til-psykologhjaelp-fastholder-ikke-personer-i-uddannelse-og-job/?utm_campaign=Nemmere%20adgang%20til%20psykologhj%C3%A6lp%20fastholder%20ikke%20personer%20i%20uddannelse%20og%20job%20%7C%20Unge%20i%20risiko%20for%20spiseforstyrrelser%20f%C3%B8ler%20sig%20godt%20hjulpet%20i%20initiativ.