TRANSFER INCOMES (2)

One of the key indicators in a country such as Denmark with a large welfare state is the number of people on transfer incomes, those of working age who, for one reason or another, are not working but receiving an income from the state. Here it is more than one fifth of the population.

The figure fell gently from its high in the mid-1990's (though a large part of that was due to some of those people becoming pensioners), but then jumped up again following the current financial crisis in 2008. However, since 2010 there have both been lots of reforms and a further gentle fall of some 46,000, a bit over 5%. That has led to a debate about what to do next; take the 5% and the downward trend as evidence that things are on the right course, or ramp up the reform programme, so that the the headline number is reduced even further.

Economically, the second course (advocated by big companies and employers' organisations) would be the right course. Politically, it is the first course that looks more promising. As in other areas, politics trumps economics, so I don't expect any further radical action any time soon.

Walter Blotscher