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Fewer people receive benefits in Denmark despite rising unemployment

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Ritzau/The Local - [email protected]
Fewer people receive benefits in Denmark despite rising unemployment
The number of people receiving basic unemployment benefits in Denmark dropped in late 2022, shirking the trend for unemployment itself. Photo by Andrew Neel on Unsplash

The number of people in Denmark who receive the basic form of unemployment benefit, kontanthjælp, fell in the final quarter of last year.

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Data released by Statistics Denmark on Tuesday show that there were just over 98,000 people in receipt of kontanthjælp at the end of 2022.

The number is lower than in the preceding quarter but higher than in the fourth quarter of 2021.

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Kontanthjælp is the basic form of public benefit given to people who are not employed. It is distinct from dagpenge, which requires membership of a semi-privatised A-kasse and gives them the right to receive unemployment benefits should the member become unemployed.

READ ALSO: Everything foreigners in Denmark need to know about unemployment insurance

The current number of people receiving kontanthjælp is surprisingly low despite being higher than it was 12 months prior, according to Erik Bjørnsted, senior economist with trade union Dansk Metal.

“The energy crisis, inflation and rising interest rates could easily have caused a strong increase in the number of people receiving unemployment benefits, but employers have needed labour despite these shocks,” he said.

The drop in the fourth quarter followed a similar fall in the third quarter of 2022, an additional sign that the labour shortage is driving the trend according to Bjørnsted.

The number of people receiving the unemployment benefit exceeded 100,000 last summer, however. This was primarily a result of the arrival of Ukrainian refugees and their subsequent availability to the labour market.

Unemployment has risen in Denmark in recent months, with January, the most recent month for which figures are available, the third month in a row that the number of people out of employment went up.

That makes the drop in people who receive benefits surprising, according to deputy director of the Confederation of Danish Industry, Steen Nielsen.

“It could be a sign that [unemployed people] cling to the labour market even in times when trends are turning,” Nielsen said in a comment to news wire Ritzau.

READ ALSO: Denmark set to permanently ease work permit rule as bill reaches parliament

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