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, the EU Commission, OECD, and the World Bank. 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 the Finnish Economic Policy Council, and commissions appointed by the governments of Sweden, Norway and Greenland
PhD, Université Catholique, Louvain-la-Neuve, 1986
"COVID-19 effects on the economy in the Nordics." Nordic Economic Policy Review (2022) (with S. Holden and S. Honkapohja).
"Resolving intergenerational conflict over the environment under the Pareto criterion." Journal of Environmental Economics and Management 100 (2020) (with J. Bhattacharya and P. Liu).
"Taxation of capital income in overlapping generations economies." Journal of Public Economic Theory 22:5 (2020): 1245–1261.
"Intergenerational debt dynamics without tears." Review of Economic Dynamics 35 (2020): 192–219 (with J. Bhattacharya).
"The intergenerational welfare state and the rise and fall of pay-as-you-go pensions." Economic Journal 127 (2017): 896–923.
The Danish flexicurity model has proven its resilience to large shocks, with favorable overall labor market performanceTorben M. Andersen, April 2023Denmark is often highlighted as a “flexicurity” country with lax employment protection legislation, generous unemployment insurance, and active labor market policies. This model has coped with the Great Recession and the Covid-19 pandemic, avoiding large increases in long-term and structural unemployment. The recovery from Covid-19 alongside re-openings has been swift, so labor market effects were temporary. A string of recent reforms has boosted labor supply and employment; although fiscal sustainability is ensured, demographic changes challenge the labor market. Real wage growth has been positive and responded—with some lag—to unemployment.MoreLess
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
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