Disability employment initiatives: review of recent evidence from Denmark and Sweden
This review has been carried out in response to the aims of the Fair Work Action Plan and associated evidence plan. It looks to examine the evidence surrounding the promotion of disability employment in Active Labour Market Policies (ALMPs) in Denmark and Sweden.
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2. Findings from Denmark
2.1 Disabled people’s employment
Denmark is one of the few countries among the Organisation for Economic Co-operation and Development (OECD) countries, where there has been a visible improvement in both the employment rate of disabled people and the disability employment gap in recent years.
The most recent data available for Denmark shows that the employment rate for disabled people was 59.5% in 2020 5 and, the disability employment gap was 20.4 percentage points in 2023 6.
2.2 Characteristics of the employability support system
The Danish system of ALMPs stands out within the European Union due to its highly decentralised nature, where municipalities are empowered to design and implement policies with significant autonomy 12.
The national public employment service plays a supportive role in policy design and implementation, while a robust accountability framework ensures that municipalities effectively deliver on these initiatives, with involvement of organisations representing employers and workers 12,13,14,15,16.
Denmark’s flexicurity model, which balances labour market flexibility with income security, has been a cornerstone of these efforts 12.
2.3 Key findings on the effectiveness of ALMPs
Review of the evidence on the effectiveness of Denmark’s ALMPs centred around the following themes:
- Overall effectiveness of ALMPs in Denmark;
- Structural barriers to employment for disabled people;
- Utilisation of data;
- Characteristics and effectiveness of the flexi-job scheme;
- Characteristics and effectiveness of return-to-work initiatives; and,
- Employers’ attitudes.
2.3.1 Overall effectiveness of ALMPs in Denmark
The effectiveness of ALMPs is mixed. These policies have potential benefits to improve disability employment, but don’t fully close the disability employment gap 16. Key factors that significantly impact the outcomes of ALMPs are age and severity of disability 17.
2.3.2 Structural barriers to employment for disabled people
Persistent structural barriers, such as education disparities among disabled people, and a lack of strategic focus on disabled job seekers in job centres, continue to hinder employment prospects for disabled people 18.
2.3.3 Utilisation of data
The effective utilisation of data is crucial, as Denmark often links up external and internal registers with surveys 19 (for example, records of family-related information on other registers can be linked to the unemployment register), and uses linked administrative data specifically for impact evaluations 20.
The availability of data infrastructure in Denmark has resulted in extensive literature on impact evaluations of its labour market policies, such as Jobeffekter.dk (a knowledge bank developed by the Danish Agency for Labour Market and Recruitment, in collaboration with independent researchers in 2013)19.
2.3.4 Characteristics and effectiveness of the flexi-job scheme
The flexi-job scheme, designed to facilitate stable employment for disabled people through wage subsidies, has been particularly successful in increasing participation especially for those with prior work experience 21. However, evidence on its success in reducing long-term dependency on welfare benefits was less conclusive 16,22.
Some evidence suggests that reductions in financial support associated with the scheme have had unintended consequences, such as discouraging employers from hiring disabled workers 23.
2.3.5 Characteristics and effectiveness of return-to-work initiatives
Return-to-work initiatives involving early intervention to proactively manage return-to-work plans for individuals on sick leave have shown mixed results 22. Meanwhile, tailored interventions, such as Co-ordinated and Tailored Work Rehabilitation for individuals with musculoskeletal disorders, have successfully reduced sickness absence and associated costs 24.
Multidisciplinary approaches involving municipal social insurance officers, physicians and rehabilitation professionals (physiotherapists and psychologists) 25 especially those targeting mental health 26 have produced varied outcomes.
2.3.6 Employers’ attitudes
Employer attitudes remain a significant barrier 18,27. Despite financial incentives, many employers remain sceptical 27 about hiring disabled people, primarily due to concerns about productivity, higher sick leave, and the costs of workplace adjustments.