Unemployment insurance typically requires beneficiaries to have worked for a specific number of days within a defined period before receiving benefits. However young people, particularly recent graduates, often struggle to meet this requirement due to limited work experience, making them vulnerable to low income after graduation. To address this issue, Denmark has established special eligibility rules for newly graduated jobseekers and encourages them to register with the public employment service. This registration grants them access to unemployment insurance and job search assistance, including advice, guidance, and even job opportunities that may not be available to those who are not registered with the employment service.
Unemployment insurance for graduates – Denmark
Abstract
New graduates who completed a publicly recognised education of at least 18 months can receive unemployment insurance at a “graduate rate”. They are exempt from the typical minimum period of insurance and employment requirements. If they have been a member of an unemployment fund for at least a year before graduation, they can receive benefits immediately upon unemployment; otherwise, they must wait a month. Graduates must apply for admission within 2 weeks of graduation. Access to the unemployment fund is encouraged by offering free membership to students under 30 years of age one year before graduation, an offer which was enacted in 2009.
Graduates must still fulfill additional requirements, such as registering with the job centre, actively seeking employment, and attending certain meetings with their unemployment insurance funds. They must also reside in Denmark and, since May 2023, demonstrate proficiency in Danish. Failure to speak Danish means having to meet an employment requirement of 600 hours within 12 months of the last two years, which is still less strict than the employment requirement for non-graduate unemployed individuals at 1924 salaried hours within the last three years for full-time or 1 258 hours for part-time work.
Under the graduation rule, entitlement to unemployment benefit lasts for one year (1924 hours) within a two‑year reference period. Each hour worked within the reference period gives two hours extra on unemployment insurance and extends the reference period. However, the period can only be extended by a maximum of one year. The benefit amount ranges from 49 to 82% of the full unemployment benefit, depending on the graduate’s age, duration of unemployment, and whether they have children.
The scheme is widely utilised, as in 2015 47% of new graduates accessed graduate unemployment benefits within six months of completing their education – a period during which youth unemployment was still relatively high in Denmark following the global financial crisis. Overall, the Danish unemployment insurance system has been found to effectively motivate individuals to seek employment, evidenced by intensive activation programmes that boosted the average re‑employment rate by approximately 30% compared to non-participation in such a programme. Young unemployed are found to leave unemployment more quickly than older unemployed workers, for instance after 10 weeks 49.3% of people under 30 remained unemployed, while the same held for 56.5% of 40‑49 year‑olds. Another study concluded that the comprehensive policy package in the general Danish system reduced unemployment duration by roughly two weeks. Job search assistance, frequent meetings, and perceived threat of having to participate in future mandatory search activities all contribute significantly to transitioning out of unemployment.
Further reading
[4] A-Kasser (2024), DimittendSammenlign “Få dagpenge som nyuddannet”, https://www.a-kasser.dk/dimittendreglen/ (accessed on January 2024).
[1] Danish Agency for Labour Market and Recruitment (2023), Unemployment insurance funds, https://www.star.dk/en/about-the-danish-agency-for-labour-market-and-recruitment/unemployment-insurance-funds/# (accessed on January 2024).
[5] Danish Finance Ministry (2018), Dagpenge til nyuddannede, https://fm.dk/media/17266/dagpenge-til-nyuddannede_oekonomisk-analyse-maj-2018.pdf.
[2] Graversen, B. and J. van Ours (2008), “How to help unemployed find jobs quickly: Experimental evidence from a mandatory activation program”, Journal of Public Economics, Vol. 92/10-11, pp. 2020-2035, https://doi.org/10.1016/j.jpubeco.2008.04.013.
[3] Vikström, J., M. Rosholm and M. Svarer (2013), “The effectiveness of active labor market policies: Evidence from a social experiment using non-parametric bounds”, Labour Economics, Vol. 24, pp. 58-67, https://doi.org/10.1016/j.labeco.2013.06.002.
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