Aarhus University, Denmark, and IZA, Germany
IZA World of Labor role
Professor of Economics, Aarhus University, Denmark
Labor economics, public economics, the economics of the welfare state
Positions/functions as a policy advisor
Extensive involvement in policy advising in Denmark and various other countries and the EU Commission. Past activities include: Former chairman of the Danish Council of Economic Advisors and the Danish Welfare Commission. Former member of the Swedish Fiscal Policy Council, and commissions appointed by the governments of Norway and Greenland
PhD, Université Catholique, Louvain-la-Neuve, 1986
"Longevity, growth and intergenerational equity: The deterministic case." Macroeconomic Dynamics 20:4 (2016): 985–1021 (with M. Gestsson).
"Automatic stabilizers: The intersection of labour market and fiscal policies." IZA Journal of European Labor Studies 5:11 (2016).
"Does the public sector implode from Baumol's cost disease?" Economic Inquiry 54:2 (2016): 810–818.
"The Nordic welfare model and welfare services: Can we maintain acceptable standards?" Mauno Koivisto Lecture 2014, Research on Finnish Society 8 (2015): 85–96.
"The Danish flexicurity labour market during the great recession." De Economist 163:4 (2015): 473–490.
The Danish labor market, 2000–2020 Updated
Flexicurity has proven resilient to large shocks, but low skills and employment rates are challenges, especially among youthsTorben M. Andersen, November 2021Denmark is often termed a “flexicurity” country with lax employment protection legislation, generous unemployment insurance, and active labor market policies. This model is not a safeguard against business cycles, but has coped with the Great Recession and the Covid-19 pandemic, avoiding large increases in long-term and structural unemployment. The pandemic has had severe effects due to restrictions and lockdowns, but the recovery and re-openings in late 2020 and spring 2021 have been strong, indicating that the labor market effects are mainly temporary. Recent reforms have boosted labor supply and employment. Real wage growth has been positive and responded—with some lag—to the developments in unemployment.MoreLess
A flexicurity labor market during recession
Long-term unemployment did not rise under the flexicurity model during the great recession, despite the large drop in GDPTorben M. Andersen, July 2015Before the great recession of 2008–2009, the “flexicurity” model (with flexibility for firms to adjust their labor force along with income security for workers through the social safety net) attracted attention for its ability to deliver low unemployment. But how did it fare during the recession, especially in Denmark, which has been highlighted as having a well-functioning flexicurity model? Flexible hiring and firing rules are expected to lead to large adjustments in employment in a recession. Did the high rate of job turnover continue or did long-term unemployment rise? And did the social safety net become overburdened?MoreLess
Tuning unemployment insurance to the business cycle
Unemployment insurance generosity should be greater when unemployment is high—and vice versaTorben M. Andersen, May 2014High unemployment and its social and economic consequences have lent urgency to the question of how to improve unemployment insurance in bad times without jeopardizing incentives to work or public finances in the medium term. A possible solution is a rule-based system that improves the generosity of unemployment insurance (replacement rate, benefit duration, eligibility conditions) when unemployment is high and reduces the generosity when it is low.MoreLess