Denmark: Globalization and the Welfare State

Case Solution

Arthur A. Daemmrich, Benjamin Kramarz
Harvard Business School ()

This case describes how Denmark has offset the effects of globalization, including outsourcing and the free movement of labor, with its social benefits. Reforms implemented in the past two decades have reduced unemployment, encouraged new business creation, and placed the country at or near the top in international polls for ease of doing business. The case describes how the Danes reached a consensus that spanned international trade and outsourcing, while also helping to continually improve professional skills. In April 2009, new Prime Minister Lars Løkke Rasmussen weighed short-term reactions to a global recession against longer-term plans for the Danish labor market and macroeconomy. Can Denmark keep its borders open to the free movement of goods, services and labor while maintaining the breadth of its welfare offer?

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