Incentives Denmark

Free allocations to new entrants may also distort competition between Member States by giving different investment incentives in different Member States. In the electricity sector, this could have a serious effect on security of supply in some Member States. As an example, a comparison of the first NAP versions showed that a new power plant would get more free allowances in Germany and Finland than in Denmark - and fewer in Sweden than in Denmark. This is a point of great concern in the Danish power sector. The Association of Danish Energy Companies has estimated that a new gas-fired combined cycle plant in Denmark receives only around 80% of the free allowances it would receive in Germany and Finland. A Danish coal-fired power plant receives only half of the allowances it would receive in Germany and Finland. For both types of plant, a Swedish power plant receives even fewer allowances. 

The effect of activation on job search has been analysed by Geerdsen (2002) in a study concerning incentive effects in Denmark. Empirical data on search activity is usually collected as survey data from a certain period of time and is therefore not suitable for an analysis of change within a period. Instead, it is possible to measure the departure from unemployment by using register data on the duration of unemployment spells. The empirical approximation to change in search activity is therefore the probability of leaving unemployment as the duration of the spell increases and the individual approaches the start of the activation period. 

Financial support in Sweden as well as in Denmark is only granted if all possibilities of re-integration into the labour market are exhausted. However, the job seeker has an entitlement on comprehensive help when searching a job. This quid pro quo doctrine is the core element of activation in both countries. In Denmark, the local job centre examines the unemployed person s readiness for work. If an unemployed person does not accept a reasonable work offer or if there are doubts on his or her readiness for work, the benefits may be suspended until the readiness for work is proven. Besides, in Sweden a positive incentive is set by means of a special benefit, the activity support, which is additional cash benefit that a job seeker receives only if he or she participates in activating measures. 

Financial incentives may also be used to increase the uptake of evidence at the local level rates of influenza vaccination in Denmark were for instance increased following the introduction of targeted payments to patients, whilst in the UK cervical cytology screening became more widely employed following the introduction of additional performance related payments based on the level of uptake achieved [19]. 

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