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By Tkjitzinsky W. J.

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Whether the strong emphasis on education and training is enough to bring about a substantial reduction of the structural unemployment problem is an issue that goes beyond the scope of this chapter. However, there is evidence which indicates that some of these initiatives have very little impact. For example, a statistical study of the (unemployed) individuals who participated in the so-called AMU (labour market training) programmes shows that the probability that they get a job afterwards is not higher than non-participants’ probability of finding a job, controlling for a number of other factors (see Jensen and Jensen, 1996).

Fourth, the revenue collected from taxes on goods and services has in recent years converged on the European average, now amounting to about a third of the total revenue. In the United States, however, indirect taxes count much less. VAT is by far the most important indirect tax in Denmark, accounting for more than 50 per cent of the total indirect tax revenue. 6 This fact partly explains why the residual category ‘other taxes’ is substantially lower in Denmark than in other parts of the world.

The generosity of the Danish welfare programmes may also be reflected in the way many transfer payments have been indexed. For example, in the area of public pensions to the elderly, evidence shows that the purchasing power of public pensions increased by more than real wages of blue-collar workers over the period 1970–92 (see Socialkommissionen, 1993). A certain ‘sense of entitlement’ may also have become particularly widespread in Denmark and other Scandinavian welfare states. An example is Problems, Policies and Prospects 23 early retirement benefits which were introduced in 1979 as a temporary measure to improve job opportunities for young workers by stimulating elderly workers to leave the workforce.

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