The developments of activation policy

At the end of the 1970s, unemployment and in particular youth unemployment was high and stable compared to levels before the oil crisis started in 1973. Many persons suffered long-term unemployment and were about to exhaust their maximum benefit period of two and a half years and thus lose rights to unemployment insurance. Therefore, in 1978 the Social Democratic-Liberal Coalition Government fostered an employment plan that intended to reduce youth unemployment and prevent unemployed from losing benefits. 

Looking back, two tracks can be identified in the employment plan a citizen wage track and an activation track. The citizen wage track was built on the idea that a finite amount of work could be shared by the population. The redistribution of employment from senior to young people was in this belief the aim of the voluntary early exit benefits (efterhn) introduced in 1979. 

During the 1980s nothing special happened with regard to activation. In 1985 an education offer (uddannelsestilbud, UTB) for long-term unemployed (those who had completed one work offer) was introduced that paid out benefits which were equal to unemployment insurance. In 1988 activation was moved to an earlier stage of unemployment in order to improve the effect of activation. 

The perhaps most important element was mandatory activation of young unemployed on social assistance. To provide disincentives for young people to receive 

The big breakthrough for activation came with the labour market reform in 1994, which was part of a major reform package. The reform of the unemployment insurance scheme and the active labour market policy (ALMP) took place alongside the extended leave schemes and the improved early retirement possibilities for persons over 50 years, and a tax benefit reform. Just as in 1979, there were both elements of an activation track (unemployment insurance and ALMP) and a citizen wage track (leave schemes and early retirement). 

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The labour market reform was followed by annual adjustments in the 1990s. These adjustments were often agreed upon as part of the budget negotiations between political parties in Parliament. Therefore, the development of activation policies in the 1990s went through three phases (1) the labour market reform I of 1994, (2) the labour market reform II of 1996 and (3) labour market reform Iff of 1999. 

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