ABSTRACT
This chapter considers the case of Denmark. In the early 1990s, facing high unemployment, low growth, a public sector nearly immobilized in the face of economic decline, and a long-smoldering revolt against an apparently incapacitated state, Denmark reconfigured its welfare state to create a system called flexicurity. The essential idea of flexicurity—conveyed by the name—is to combine high flexibility in labor markets with high levels of security for workers. The cumulative effect of flexicurity for individuals, moreover, is to encourage an economy-wide shift in favor of more skilled jobs, as well as innovative firms that can make use of them. Flexicurity is not what a "nanny state" does when it is taking charge of its responsibility-challenged, incapacitated wards; it is not what a sadder-but-wiser, postnanny welfare state does when it compensates citizens for some hard luck in youth before sending them out to face the tough, cold world.
