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This chapter analyses the recovery of the Danish economy from the crisis of the 1980s, its elevation to a bit of an ‘economic miracle’ or at least an ‘employment miracle’ from 1995 to 2005 and its subsequent decline during the financial crisis, which revealed more long-standing problems that precluded a quick recovery. The solution of Denmark's structural balance of payment problems in the early 1990s paved the way for long-term prosperity, and Denmark managed the challenges of globalisation and deindustrialisation almost without social costs. However, an accumulation of short-term policy failures and credit liberalisation facilitated a credit and housing bubble, a consumption-driven boom and declining competitiveness. In broad terms, the explanation is political; this includes not only vote- and office-seeking strategies of the incumbent government but also ideational factors such as agenda setting of economic policy. Somewhat unnoticed – partly because of preoccupation with long-term challenges of ageing and shortage of labour – productivity and economic growth rates had slowed down over several years. The Danish decline in GDP 2008–2009 was larger than in the 1930s, and after the bubble burst, there were few drivers of economic growth. Households consolidated and were reluctant to consume; public consumption had to be cut as well; exports increased rather slowly; and in this climate, there was little room for private investments. Financially, the Danish economy remained healthy, though. Current accounts revealed record-high surpluses after the financial crisis; state debt remained moderate, and if one were to include the enormous retained taxes in private pension funds, net state debt would de facto be positive. Still, around 2010–2011 there were few short-term drivers of economic growth, and rather unexpectedly, it turned out that unemployment problems were likely to prevail for several years.

Scholars often suggest that institutionalized employee voice reduces turnover as an alternative to exit when employees are dissatisfied. Paradoxically, Denmark presents a case of high union density and thus high institutionalized employee voice, yet high turnover rates. To explore the Danish turnover paradox, this chapter looks at the macro-societal contextual factors impacting turnover rates in the Danish labor market. Institutional characteristics such as the flexicurity model (i.e., a welfare state model with proactive labor market policy; a portmanteau of flexibility and security), legal frameworks (i.e., relatively lax labor market regulations), and cultural factors (i.e., a culture of equality and collective collaborative structures) are all relevant to understand the high turnover rates in Denmark. The authors first overview the general trends and figures on turnover in Denmark and then examine the Danish institutional, legal, and cultural factors as they relate to the high turnover rates in the Danish labor market. Finally, the authors summarize and discuss the findings and consider their implications for research and practice related to employee turnover in the Nordics and beyond.

The Danish Social Democrats have been through a lengthy period of ideological change and transformation, whose effects have become particularly manifest in recent times. This chapter argues that these developments are to be seen in the light of the particular Danish political context and developments, already prefigured at the dawn of the century. Notably, the populist and anti-immigration right in Denmark which quickly made use of the political opportunities to exploit the weaknesses, indecision and the ambiguities on the Right and the Left to gain support. The strategy repertoires activated by the Social Democrats to stem the electoral appeal of the right-wing populist anti-immigration have shifted from attempts to isolate, ignore and dismiss the saliency of some policy issues, towards efforts to adverse and recently to accommodate and co-opt stricter positions on immigration and tougher integration politics. While it is premature to tell whether the Social Democratic right wing turn on immigration helped undermining the populist right-wing momentum, the party has not yet managed to take back the support it hoped for. Moreover, the paradigm shift on immigration and the opening up to transversal alliances might mobilise new friends, but also shed old ones. The new pattern undertaken by the Danish Social Democrats seems also to require internal consent, more control and party discipline to avoid internal disagreements and criticism from within the party. Our interviews unravel some discontent with the restrictive right turn on immigration bubbling under the surface among the party ranks and files.

The chapter presents a historical and economic analysis of Nordic wage formation, with a special focus on how collective agreements really work. A stereotypical interpretation of the evolution of Nordic wage bargaining systems is that a centralised setting of wages has gradually been substituted with more decentralised pay bargaining. This overlooks the fact that central organisations could never really control wage levels, even in the golden age of centralised bargaining. Instead, central pay bargains defined minimum wage changes that ensured that local conflicts would be ruled out. Moreover, the central stipulations could often be overruled or adjusted at the local level. Following insights of Teulings and Hartog, we argue that the main function of Nordic collective agreements has always been to rule out local conflicts that would otherwise be initiated to seek local rents. Thus, collective agreements combine macroeconomic flexibility with adequate investment incentives at the local level. In this crucial sense, Nordic collective agreements are a completely stable institution. The most important transformation that has taken place is that formal peak bargaining on mean pay increases has been substituted with pattern bargaining where the manufacturing industry acts as a wage leader. Economic theory suggests that this almost amounts to centralised pay setting.