The Greater Copenhagen Region is among the leading cross-border regions in Europe in terms of regional GDP per capita and is a central hub for economic activity in Scandinavia. The Greater Copenhagen Region (GCR) is a political construction that covers four regions, 85 municipalities and 4.4. million inhabitants across southern Sweden and eastern Denmark. Since the opening of the Oresund Bridge in 2000, economic and labour market integration in the region has increased significantly. In 2023, cross-border work reached an all-time high of 20 500 people registered for work in one of the countries while residing in the other – compared to approximately 2 800 people in 1999. In addition, between 2010 and 2020, the region’s GDP increased by 33%, reaching more than EUR 200 billion in 2020. The region also benefits from significant investment in research and development activities (2.9% of GDP in 2021) and a high level of foreign direct investment. For students and workers, the region offers world-class education and high-performing businesses in areas such as technology, life sciences and social sciences
While the Greater Copenhagen Region is a dynamic economic area with high employment and low unemployment, it suffers from within-regional inequalities in labour market performance. Total employment in the GCR reached 2.3 million in 2023, a substantial increase from 2 million in 2013. Around 58% of the net employment growth occurred in the Capital Region of Denmark, which now accounts for half of all employment in the GCR. In 2023, the employment rate among 16-64-year-olds in the Greater Copenhagen Region was 77.9% – just above the employment rate in Denmark (77.6%) and Sweden (77.4%) and well above the OECD average (70.0%). Yet, large within-regional differences exist in both the employment and unemployment rates in GCR. While the Capital Region (2.5%) and Zealand (2.3%) in Denmark were nearing full employment, Region Scania (6.6%) in Sweden reported considerably higher unemployment rates. Within Region Scania, Malmö, the largest city, stands out with the highest unemployment rate (7.9%), emphasising regional imbalances.
Relatively high unemployment rates on the Swedish side coincide with increasing labour and skills shortages, especially on the Danish side of the border. The job vacancy rate (i.e. the number of job vacancies as a percentage of total labour demand) in the Capital Region of Denmark (2.8%) in the first quarter of 2024 was substantially higher than in Southern Sweden (0.8%). Combined with factors such as a relatively stronger Danish currency and relatively lower housing prices in Sweden, this explains why more than 90% of the region’s cross-border workers reside in Sweden and work in Denmark.
The steady integration of GCR’s labour market has opened opportunities for many of the region’s residents, but third-country nationals on the Swedish side have yet to benefit significantly. In the European Union (EU), a third-country national (TCN) is defined as any person who is not an EU citizen and does not enjoy the EU's right to free movement. On average, between 2014 and 2023, the population of non-EU citizens stood at 66 000 on the Swedish side of the GCR, corresponding to around 4% of the total population in Southern Sweden. Low- and medium-educated TCNs in Southern Sweden experienced lower employment rates than TCNs in Denmark’s Capital Region and Swedish nationals in Southern Sweden. In 2023, the employment rate for medium-skilled TCNs in Southern Sweden was 62% compared to 79% for Swedish nationals in Southern Sweden and 72% for TCNs residing in the Capital Region of Denmark. Despite the lower employment rate among working-age TCNs on the Swedish side of GCR and high labour demand on the Danish side, only 1% (or less than 200 individuals) of the total group of cross-border workers from Sweden to Denmark were TCNs.
Despite significant progress, several barriers to cross-border labour market integration and mobility, including for TCNs, remain. Cross-border work makes up less than 1% of the total employment in GCR (at 2.3 million in 2023) and, hence, remains moderate compared to the EU’s largest cross-border labour markets, such as the Greater Region (with around 250 000 cross-border workers between regions in Belgium, France, Germany and Luxembourg) and the Meuse-Rhine Region (with more than 75 000 cross-border workers between regions in Belgium, Germany and the Netherlands). To further illustrate the potential size for cross-border working, if the region exhibited commuting patterns like those within Denmark or Sweden, 95 000 or more than four times today’s rate would commute across the border. The main barriers include differences in taxation, social security and pension rules, a lack of coordination of education systems, border checks, and digital ID systems. For TCNs, national and EU migration laws and their interaction across countries constitute the primary barrier to cross-border commuting for TCNs in GCR.
Barriers to cross-border mobility, particularly for TCNs, hinder the region from reaching its full potential. In the face of growing labour and skills shortages and shifting demographics, integrating all groups into the labour market – including through cross-border labour mobility – is essential to sustaining economic growth and development. Although the TCN population in the region is relatively small, it represents an untapped labour pool that could help address these challenges. Furthermore, with the ongoing changes in naturalisation rules, particularly in Sweden, there is a risk that the TCN population may grow significantly if pathways to citizenship narrow. Reducing barriers to cross-border labour mobility, including for TCNs, could help to ensure that TCNs can play a strong role in the labour market and help address labour and skills shortages, for instance, easing employment restrictions on the spouses of TCNs with work permits.
Public Employment Services (PES) can enhance labour mobility and inclusion in a cross-border labour market by supporting job seekers in one part of the region to work in another. To facilitate cross-border work, PES operations on each side of the border must be well-coordinated and have strong information-sharing mechanisms at both the institutional and individual levels (e.g. through job portals). While Denmark and Sweden have well-developed and high-performing national systems for publicly funded employment services and multiple organisations and public bodies aiming to facilitate cross-border mobility in GCR, measures to co-ordinate employment and skills policies are limited. Other EU cross-border regions, such as the Greater Region, the Meuse-Rhine Region and the Upper-Rhine Region (encompassing regions in France, Germany and Switzerland), all have important examples of cross-border coordination from which GCR can learn.
To strengthen cross-border labour market integration, stakeholders in GCR could take action in the short and long term based on the following recommendations:
Strengthen options for cross-border labour mobility of TCNs in GCR:
Strengthen information-sharing about TCN cross-border mobility: Policymakers and other stakeholders lack information on cross-border mobility for TCNs in the region. Regional stakeholders could take the initiative to re-establish cross-border data on TCN mobility and commuting (following the break in data sharing in 2015) through the Oresund Database in co-operation with national statistical offices. In addition, the cross-border information point Oresund Direct could build up capacity to support TCNs and employers interested in cross-border work.
Introduce administrative changes to facilitate mobility: The migration agencies in Denmark and Sweden and the Swedish Taxation agency (Skatteverket) could issue official guidelines to clarify the consequences of cross-border work for different categories of TCNs. Both migration agencies could also take steps to establish a mechanism for sharing information on the granting and withdrawal of work and residence permits.
Pursue legislative changes to facilitate mobility: Inspired by other EU cross-border regions, Denmark and Sweden could introduce definitions of cross-border commuting aligned with the EU definition, and Sweden could consider introducing a cross-border worker card to help identify and facilitate TCN cross-border movements. In addition, the Swedish government could take steps to clarify the legislative framework in Sweden regarding the implications of existing residence permits when cross-border commuting. More fundamentally, both countries could consider introducing legislative changes to clarify that cross-border commuting 1) should be counted as employment and income activity that meets the active employment and economic self-sufficiency requirements in their resident country and 2) should not count as a period of absence for i) permanent residence holders, ii) students during or in the period just after finishing their studies, iii) family members and iv) refugees who have completed the asylum process.
Enhance the coordination of employment and skills policies across borders in GCR:
Establish measures to share information and data for Public Employment Services and jobseekers: GCR could establish a Cross-border Labour Market Observatory to collect and share data. In addition, the two countries could develop a mechanism for regular exchange of labour market information between the two PES. While the Cross-border Labour Market Observatory could focus on employment and skills trends at the macro level, the PES exchange could focus on micro-level data to support day-to-day operations. In addition, the two PES could explore ways to share job vacancies with jobseekers across the region, e.g. by making better use of the EURES (European Employment Service) portal.
Create a joint one-stop-shop solution: Taking inspiration from other EU cross-border regions, GCR could strengthen the role of Oresund Direct as the main cross-border information point and take steps to turn it into a one-stop-shop for cross-border workers and employers.
Develop joint policy, training, and career guidance programmes: Guidance for cross-border job searches could be strengthened by strategically using the EURES advisors present in PES on both sides of the border. There are also options to design and pilot cross-border re- and upskilling programmes targeted at sectors experiencing labour and skills shortages and to organise targeted cross-border job fairs and other job search assistance programmes. Moreover, the region could reopen the debate about options to design cross-border work placement or on-the-job training programmes (e.g. apprenticeships).
Take steps for stronger policy coordination and capacity building across Public Employment Services: Options to strengthen policy coordination and capacity building include strengthened strategic operation between the two PES and mechanisms for sharing successful strategies and programmes and developing joint training programmes for PES staff across borders.
