Thinktank Economic Council of the Labour Movement (Arbejderbevægelsens Erhvervsråd, AE) has concluded in a new analysis that there is a higher risk of both poverty and social exclusion in Denmark than any of the other Nordic countries-
More people in Denmark experience significant material and social deficits and more are financially vulnerable compared to Norway, Sweden and Finland.
Inflation is part of the explanation for the issue but does not account for it entirely, the thinktank said in a press release on Tuesday.
More people are financially vulnerable in Denmark compared to its Nordic neighbours and Denmark ranks lower than the other countries on a number of parameters used to measure financial wellbeing, AE has concluded based on an analysis of Statistics Denmark and Eurostat figures.
‘Financial vulnerability’ or økonomisk udsathed is a term relating to a number of indicators including the risk of poverty or social exclusion. Over one in seven people in Denmark fell within the category in 2024, AE said.
Some 18 percent are at risk of poverty or social exclusion compared to 17.5 percent in Seden,16.8 percent in Finland and 15.7 percent in Norway, according to the group.
“These are countries we should be able to compare ourselves with, but we are in last place on a number of indicators,” AE’s deputy director Emilie Damm Klarskov said in the press release.
The analysis includes both objective and subjective measures of financial wellbeing, it said.
“If you only look at relative poverty, Denmark is actually faring best in the Nordics, but the facade crumbles under broader analysis. This method can reveal new aspects of financial insecurity which our normal poverty measures do not catch,” Klarskov said.
Although the proportion of people with relatively low incomes is not higher in Denmark than its neighbours, people in Denmark are more likely to go without basic necessities for lack of money, the analysis found.
Denmark meanwhile scored highest in the category of “material and social deprivation” or omfattende materielle og sociale afsavn, in which they were asked whether they could pay an unforeseen bill, can heat their home, replace worn-out shoes and go to leisure activities.
Some 4 percent were found to fall into this deprivation category in Denmark, compared to 3.7 percent in Finland, 3 percent in Sweden and 2.8 percent in Norway in 2024. Although Denmark’s number is higher than the other countries, the gap is reducing, the analysis found.
Denmark has seen a steeper increase in financial vulnerability than other countries in the Nordic region since the 2022 inflation crisis.
Energy and food prices rose drastically in 2022 and food prices remain high and rising for several product categories, an issue the government has said it is tackling with the 2026 budget, which includes a series of tax cuts on consumer goods.
The analysis suggests inflation has inflation has hit Danish consumers harder than those in Norway, Sweden and Finland, AE’s deputy director said.
“It’s become much more expensive to live in Denmark in recent years and people with the lowest incomes can really feel it,” she said.
“But it’s important to stress that this doesn’t explain the difference between Denmark and the other Nordic countries,” she said.
“That’s why we need more studies, for instance the effect of our unemployment welfare system, to help shed light on the reasons,” she said.
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