The ”Rotten Banana” is human capital - an analysis of Danish municipalities’ use of education and training in the activation of unemployment benefit recipients

Abstract

The use of ordinary education and training in the Danish employment system has signifi cantly declined since the 1990s. The trend was initiated by a number of policy reforms in the 2000s underlining the “work first”-approach to active labour market policy, and reinforced from a major organizational change in 2009 when the responsibility for implementation was transferred from the state-run public employment service to job centers run by the municipalities. However, there are major proportional differences to the use of education and training among the municipalities. To illustrate this, more than 50% of the activated unemployment benefi ts recipients in Hjørring Municipality were offered education in 2016, while the equivalent was only 3% in Gladsaxe Municipality. In the article, we investigate which factors might cause these differences by constructing a dataset from several offi cial databases containing labour market statistics and background data on the 94 biggest municipalities. Through linear regression analyses we explore three plausible explanations for the variation in the use of education and training; functional/ systemic explanations, political/historical institutionalist explanations and rational choice institutionalist explanations. We fi nd empirical support for both functional/systemic explanations and the political/historical institutionalist explanations. Municipalities with center-left mayors use significantly more education than municipalities with center-right mayors. Moreover, we identify the 10 municipalities with the highest use of education. Seven of these are geographically located in the north-western part of Jutland, the so-called “Rotten Banana” – a term used to describe areas in the periphery of Denmark experiencing low economic growth and population decline. We discuss possible explanations for this finding in the final section of the article.