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.
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.
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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.
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