By Jonathan Smith, OECD Economic Department
Denmark has for many years enjoyed a well-functioning labour market. Employment levels have reached new record highs and participation rates have risen over the past decade even for those groups with historically low attachments to the labour market. However, the demographic, digital and green transitions are rapidly transforming jobs and skills requirements.
These transitions can represent an opportunity. Denmark is already well advanced in the adoption of digital technologies and outsourcing its low value-added activities. But, it can also challenge the well-functioning labour market and complicate the matching between the supply and demand for workers. This is already visible in the chronic labour shortages prevalent in areas directly affected by these mega trends, notably ICT, engineering, and long-term care.
This fast transformation calls for agile labour and education policies as persistent labour shortages hold back productivity. As highlighted in the latest Economic Survey of Denmark, three areas could assist in this transformation: (1) increasing the take-up of science, technology, engineering, and mathematics (STEM) education among girls; (2) making vocational education more attractive; and (3) increasing efforts to widen the recruitment pool in long-term care.
Increasing the take-up of STEM education by girls
Denmark has a relatively low number of STEM graduates compared to peer countries like Sweden, Finland and Germany. Danish girls are particularly unlikely to choose STEM subjects. While gender gaps are generally low in Denmark, there are significant imbalances in STEM (Figure 1). This in part reflects a general trend of occupational gender segregation in Denmark – acknowledged in Denmark’s 2023 action plan on gender equality – and it contributes to the already low number of Danish STEM graduates in a field where demand is high and rising.
Studies suggest segregation occurs early in life, so providing girls with the opportunity to interact with STEM from an early age is key. Plans to introduce a new subject into early schooling called “understanding of technology” moves in the right direction, but Denmark must implement a broad approach. This includes teacher training and increased awareness of internalised beliefs, outreach activities to tackle gender biases, and showcasing female role models to counter underlying stereotypes.
Figure 1: Difference in the share of tertiary graduates in STEM between males and females
Note: STEM (science, technology, engineering, and mathematics).
Source: OECD Education at a Glance database.
Improving attractiveness of vocational education
Vocational education and training (VET) will play a key role in providing the skills needed for the low-carbon transition. In Denmark, green activities employ 10% more vocationally trained staff than the average. Yet, the share of young upper secondary students enrolled in vocational programmes is relatively low (Figure 2) and declining over the past decade. Denmark must make vocational tracks more attractive.
While the Danish VET system is well developed, it suffers from an image problem, particularly among younger students. First, age gaps between students are large – those that do choose VET straight from lower secondary school are often mixed with adult VET students – and this leads to a lack of social community. Creating an exclusive pathway for those straight out of lower secondary school, as proposed by the Danish Reform Commission, would help. Second, many Danish young students see VET as a one-way street as it mostly closes the door to academic tracks in the future. This lack of mobility between academic and vocational tracks drives people away from VET. Denmark should consider developing programmes across tracks, something that has been implemented in Flanders.
Figure 2: Share of upper secondary students enrolled in vocational programmes
% of 15-19 year olds, 2021
Source: OECD Education at a Glance database.
Expanding the recruitment pool in the long-term care sector
The ageing population is putting increasing pressure on the Danish long-term care sector. Estimates suggest Denmark will need around 50% more care workers by 2040 just to keep the current ratio of caregivers to the elderly population constant and maintain high standards of care. But, staff attrition rates are high and enrolment in social and health education programmes are below required levels.
While pay and working conditions need to improve – Danish care workers should benefit from a DKK 6.8 billion package of pay-related measures for the public sector recently agreed as part of the tripartite negotiations – efforts must be made to widen recruitment from beyond the traditional pool of predominately Danish female workers. Denmark has one of the lowest shares of foreign-born care workers in the OECD and relaxing criteria for work permits in this area could expand recruitment. Care work also suffers from a stigmatised image among men, therefore enhanced efforts are required to change gender stereotypes, such as through public awareness campaigns and targeted training programmes.
References
OECD (2024), OECD Economic Surveys: Denmark 2024, OECD Publishing, Paris, https://doi.org/10.1787/d5c6f307-en