Danish "Flexicurity" Failing The Test Of Recession
Already then, the strategy wasn't really as successful as it seemed because there was a lot of "hidden unemployment", but then again that was true of Germany and Sweden as well.
Yet during the recession in 2008-09, Denmark saw a much greater decline in employment than both Germany and Sweden and while both Germany and Sweden are now experience robust job growth (so robust that in both countries employment is now higher than before the recession), Denmark continues to experience a decline in employment.
As a result, despite the fact that "hidden unemployment" has declined in Germany and Sweden but not in Denmark, Denmark (7.9%) now has a higher unemployment rate than both Sweden (7.6%) and Germany (6.3%).
While employment is up 3% in Germany and 2.6% in Sweden since 2007, it is more than 2% lower in Denmark (hours worked is down 4%).
Note that the German gains are a lot more impressive given that it has had a slight population decline while Sweden's population is up by 3% and Denmark's population is up by 2.1% since 2007.
The main reason for the poor Danish performance is that while both Germany and Sweden has improved incentives, Denmark's government has failed to do anything useful in this aspect.