The document provides an economic survey of Denmark by the OECD. Key points include: - Denmark's economy is growing after a long recovery, though productivity growth is lagging, especially in the services sector. - Public finances are sustainable if retirement ages continue to rise as planned. - The financial sector is very large and household debt remains high despite decreases. - High digitalization in Danish firms has not yet boosted productivity, and mark-ups are rising in some sectors.

1. 2019 OECD ECONOMIC
SURVEY OF DENMARK
Sustaining prosperity and wellbeing
Copenhagen, 15 January 2019
http://www.oecd.org/eco/surveys/economic-survey-denmark.htm
@OECDeconomy
@OECD

2. Key messages
Policy should take advantage of the good economic conditions
Hard decisions are required to further reduce financial vulnerabilities
Boosting productivity is the key challenge to sustain high living standards

3. The economy is growing after a long recovery
GDP per capita
Thousand USD, constant prices, 2010 PPP
Note: Other Nordics is a simple average of Finland, Iceland, Norway and Sweden. Euro area is a weighted average (19 countries).
Source: OECD National Accounts database.
30
35
40
45
50
55
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
DNK Other Nordics Euro area USA

4. -1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
CHE BEL FIN FRA NLD AUT DNK GBR USA CAN NOR SWE DEU OECD AUS IRL
GDP per capita Export pricesrelative to import prices Net income from abroad GNI per capita
Other factors have lifted real incomes and
compensated for weak economic growth
Real income growth per capita
Average annual growth, 2000-2017
Source: OECD National Accounts.

5. 22 21
14
9 9
7
4 3 3 2 1
Housing Health status Income Education &
skills
Personal
security
Environmental
quality
Jobs &
earnings
Civic
engagement
& governance
Social
connections
Work & life
balance
Subjective
well-being
20% top performers 60% middle performers 20% bottom performers Denmark
Wellbeing ranks at the top in most dimensions
Source: OECD Better Life Index 2017 database.
OECD Better Life Index
Country rankings from 1 (best) to 35 (worst), 2017

6. Gender gaps are slowly closing
Note: The participation gap is defined as the difference in labour force participation rates for men and women aged 15-64.
Source: OECD Labour Force Statistics.
Labour market participation gap
0
5
10
15
20
25
30
0
5
10
15
20
25
30
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
% points% points
DNK Other Nordics OECD

7. Employment rates for foreign-born are close to OECD
averages – but the gaps to natives are sizeable
Men Women
Source: OECD Migration Statistics.
40
50
60
70
80
90
FRA
BEL
FIN
SWE
DNK
NLD
AUT
NOR
DEU
OECD
GBR
%
Foreign-born Native-born
40
50
60
70
80
90
BEL
FRA
FIN
NLD
AUT
DNK
OECD
DEU
SWE
GBR
NOR
%
Foreign-born Native-born
Employment rates by place of birth for age 25-64
2017

8. Employment growth has been strong – though
not as strong as in other OECD countries
Employment growth over the last 5 years
%-change of number of persons employed, 2013Q3-2018Q3
Note: Employment rate for age 15-64.
Source: OECD Labour Force Statistics.
40
45
50
55
60
65
70
75
80
85
90
0
2
4
6
8
10
12
14
16
18
20
NZL
LUX
IRL
ISL
HUN
ESP
ISR
TUR
SVK
GRC
AUS
PRT
MEX
SWE
USA
GBR
OECD
CHL
SVN
CZE
CHE
NLD
DNK
EST
DEU
POL
LTU
JPN
KOR
BEL
CAN
ITA
AUT
FRA
NOR
FIN
LVA
%%
Employment growth, 2013Q3-2018Q3 Employment rate, 2013Q3 (right axis)

9. 1.0
1.2
1.4
1.6
1.8
2.0
2.2
3
4
5
6
7
8
9
2005 2007 2009 2011 2013 2015 2017
%
Unemployment rate¹, left scale
Job vacancy rate, rightscale
% of labour force
The labour market is tightening
0
5
10
15
20
25
30
35
40
45
50
2005 2007 2009 2011 2013 2015 2017
Manufacturing
Construction
Services
1. Statistical break in 2016Q1 and 2017Q1.
Source: OECD Short-Term Labour market Statistics; Statistics Denmark.
Unemployment and vacancies Labour shortages
% of firms reporting labour shortages

10. Monetary conditions remain very accommodative
– reflecting the peg to the euro
Source: Danmarks Nationalbank.
Central bank lending rate
Certificates of deposit rate
-2
-1
0
1
2
3
4
5
6
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
%

11. 2017 2018 2019 2020
Gross domestic product (GDP) 2.3 1.2 1.9 1.6
Private consumption 2.1 2.5 2.2 2.2
Government consumption 0.7 0.5 0.5 0.4
Gross fixed capital formation 4.6 7.7 1.5 3.3
Exports of goods and services 3.6 -0.5 2.8 3.0
Imports of goods and services 3.6 2.9 2.2 3.8
Unemployment rate 5.7 5.2 5.1 4.9
Consumer price index 1.1 0.9 1.8 2.0
Growth is projected to continue, but moderate
Economic growth projections
Annual percentage change, volume
Note: Unemployment rate is % of labour force. A statistical recording of the export of a single pharmaceutical patent
has distorted GDP data, boosting growth in 2017 and reducing it in 2018.
Source: OECD Economic Outlook 104 database.

12. A hard Brexit would hit Danish agri-food and
manufacturing sectors hard …
Simulated impact on sectoral exports
Size of circles represent the sectoral share of total Danish exports
Source: OECD calculations using the METRO model.
Reduction in total exports, %
ReductioninexportstotheUK,%
Agri-food
Energy &
Natural Resources
Materials manufacturing
Chemicals
Metals
Motor vehicles and parts
Transport equipment
Electronic
equipment
Machinery and
equipment nec
Manufactures nec
Construction
& Utilities
Trade
Transport & Communication
Financial & Insurance
Business services
-30
-25
-20
-15
-10
-5
0
-30
-25
-20
-15
-10
-5
0
-4 -3 -2 -1 0 1 2 3 4

13. … Making Denmark among the most exposed
countries to a hard Brexit
Trade with the United Kingdom
% of GDP
Source: OECD calculations using the METRO model.
-25
-20
-15
-10
-5
0
Exports to the UK GDP (right scale)
B. The effect of Brexit on exports and GDP
%
DNK NLD IRL
-5
-4
-3
-2
-1
0
0
4
8
12
16
Exports to the UK Imports from the UK
A. Trade in goods and services
% GDP, 2016
DNK NLD IRL
Simulated effect of a hard Brexit
on exports and GDP
%

14. -4
-3
-2
-1
0
1
2
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
% of GDP
The government budget balance has gradually
improved
Note: Extraordinary tax revenues (including a pension restructuring) drive the surpluses in 2014 and 2017.
Source: OECD Economic Outlook 104 database.
General government budget balance

15. Ambitious indexation of statutory retirement ages
to life expectancy is planned
Source: Danish Government (2018); OECD Labour Force Statistics.
Planned indexation
of statutory retirement ages
55
60
65
70
75
80
85
90
95
100
2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Age
Statutoryretirement age
Earlyretirement age
Life expectancy at age 60
50
55
60
65
70
75
80
2010 2011 2012 2013 2014 2015 2016 2017
%
DNK SWE
NOR OECD
Senior employment is rising
Employment rate for age 55-64

16. Public finances are sustainable
– if retirement ages rise as planned
Note: Baseline with indexation to life expectancy assumes that the statutory and early retirement ages are increased by up to one
year every five years according to the adopted indexation mechanism. The alternative assumes no rise from 2030 onwards.
Source: OECD calculations based on the Danish Government (2018).
Government budget balance Government gross debt
-5
-4
-3
-2
-1
0
1
2
3
4
5
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Baseline with indexation
Fixed statutory retirement ages from 2030
% of
potential GDP
0
10
20
30
40
50
60
70
80
90
100
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Baseline with indexation
Fixed statutory retirement ages from 2030
% of GDP

17. • Gradually tighten fiscal policy to reflect the economic upturn and
build fiscal space for a future setback
• Increase flexibility in the provision of childcare services to further
narrow gender gaps in the labour market
• Encourage parents to split parental leave more equally by
reserving the share reserved for each parent
• Spread best integration practices across municipalities and
strengthen co-ordination of services
• Improve the integration-training programme in collaboration with
social partners and make it permanent
• Reform public sector collective bargaining towards broader and
higher-level agreements, allowing more bargaining at the local level
• Implement the most cost-efficient greenhouse gas emission
reductions first
Recommendations to sustain inclusive growth
and improve public sector efficiency

18. The financial sector is very large
Financial corporations
Total financial assets by subsector, 2017
Note: Other financial institutions includes non-MMF investment funds. Based on unconsolidated data.
Source: OECD Financial Accounts.
0
250
500
750
1000
1250
1500
0
250
500
750
1000
1250
1500
TUR
LTU
POL
SVN
SVK
EST
CZE
LVA
GRC
HUN
ISR
FIN
NOR
AUT
ITA
ESP
PRT
KOR
DEU
USA
BEL
SWE
ISL
FRA
CAN
JPN
DNK
CHE
GBR
NLD
IRL
LUX
% of GDP% of GDP
Monetary financial institutions Insurance and pension funds Other financial institutions
2,261 24,063

19. Household gross debt has decreased but is still
very high
0
50
100
150
200
250
300
350
2000 2002 2004 2006 2008 2010 2012 2014 2016
0
100
200
300
400
500
600
700
800
900
0
50
100
150
200
250
300
350
LVA
HUN
SVN
POL
CZE
ITA
SVK
EST
DEU
AUT
ISR
GRC
USA
FRA
JPN
BEL
ESP
PRT
FIN
GBR
IRL
CAN
KOR
AUS
SWE
NOR
NLD
DNK
Household gross debt
Total networth of households (right scale)
Household gross debt and net worth
% of gross household disposable income
Source: OECD Economic Outlook database.
Over time Across countries

20. House prices have risen rapidly in Copenhagen
Real house price index
2000=100
Note: Deflated by private consumption deflator.
Source: Statistics Denmark.
70
120
170
220
270
320
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Owner-occupied flats One-family houses

21. Taxation of household capital income favours
owner-occupied housing
Note: The marginal effective tax rate summarises the tax on investing one additional currency unit across different assets with
an expected holding period of five years (20 years for pension funds and housing). The tax rates are adjusted for country-specific
inflation over the period 2011-16.
Source: OECD (2018), Taxation of household savings.
Marginal effective tax rates across asset types
Average-rate tax payer, 2016
-20
-10
0
10
20
30
40
50
60
70
-20
-10
0
10
20
30
40
50
60
70
Bank
deposits
Corporate
bonds
Shares Private
pensions
Owner
occupied
property
%%
DNK OECD median country

22. • Reduce deductibility of interest expenses in personal
income taxation
• Deregulate the rental market and remove favourable
conditions for parents to buy-to-let flats to their children
• Review the pension and tax system and implement
reform to ease personal financial planning
• Improve prudential supervision and international
collaboration by joining the European Banking Union
• Increase scrutiny and implement more severe penalties
for money-laundering activities
Recommendations to strengthen resilience of
households and the financial sector

23. High digitalisation in firms has not (yet) boosted
productivity growth
Firms with high digital intensity
2017
Labour productivity growth
Total economy, annualised growth, 2000-2017
0
10
20
30
40
50
60
70
LVA
ITA
GRC
POL
HUN
FRA
SVK
CZE
EST
SVN
IRL
LUX
EU
PRT
AUT
ESP
DEU
LTU
SWE
NOR
BEL
FIN
NLD
DNK
%
Source: European Commission, Digital Scoreboard 2017; OECD Productivity database.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
LUX
NOR
BEL
NLD
CHE
FRA
GBR
CAN
DNK
JPN
DEU
FIN
AUT
OECD
AUS
SWE
USA
ISL
IRL

24. Productivity growth is lagging behind in services
Over time
Annualised labour productivity growth
Across countries
Annualised labour productivity growth, 2000-2015
Source: OECD Productivity database and OECD calculations based on OECD STAN database.
0
1
2
3
4
5
Business economy Manufacturing Private sector
services
%
1990-2000 2000-2010 2010-2017
0
1
2
3
4
5
Private sector
services
Less knowledge-
intensive services
Knowledge-intensive
services
%
DNK Other Nordics OECD USA

25. Mark-ups are stable on average, but on the rise in
certain sectors
Average mark-up rate in Danish firms
Main sector of activity
Note: Mark-up rates are calculated at the industry level as the ratio between operating surplus and input costs.
Source: Égert and Vindics (2018).
1
1.2
1.4
1.6
1.8
2
1
1.1
1.2
1.3
1.4
1.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total economy Retail trade
ICT services Pharmaceutical products (right scale)

26. Business investments are picking up and shifting
towards intangibles
Source: OECD Economic Outlook database; Statistics Denmark.
Total business investments Composition of
business investments
9
10
11
12
13
14
15
16
17
18
2000 2002 2004 2006 2008 2010 2012 2014 2016
% of GDP
DNK SWE DEU
1
2
3
4
5
6
7
8
2000 2002 2004 2006 2008 2010 2012 2014 2016
% of GDP
Intellectual property products
Buildings and structures
Machinery, ICT and transport equipment

27. The average tax wedge and the corporate income
tax rate are close to OECD averages
Note: The average tax wedge comprises income taxes plus employee and employer social security contributions for
a single household with average wage.
Source: OECD Tax database
Average tax wedge
2017
Corporate income tax rate
2018
0
10
20
30
40
50
60
CHE
IRL
AUS
CAN
GBR
USA
JPN
ISL
OECD
NOR
DNK
LUX
NLD
SWE
FIN
AUT
FRA
DEU
BEL
%
0
5
10
15
20
25
30
35
40
CHE
IRL
CAN
DEU
GBR
LUX
FIN
ISL
USA
OECD
DNK
SWE
NOR
JPN
AUT
NLD
BEL
AUS
FRA
%

28. AUS
AUT
BEL
CAN
CHLCZE
DNK
EST
FIN
FRA
DEU
GRC
HUN
ISL
IRL
ISR ITA
JPN
KOR
LVA
LUX
MEX
NLD
NZL
NOR
POL
PRT
SVK
SVN
ESP
SWE
CHE
TUR
GBR
USA
OECD
20
25
30
35
40
45
50
55
60
65
70
20
25
30
35
40
45
50
55
60
65
70
20 25 30 35 40 45 50 55 60 65 70
Overall PIT+CIT rate on dividend income, %,2017
Top marginal tax rate on labour income, %, 2017
Top marginal tax rates on labour and capital
income are very high
Note: The top marginal tax rate includes personal income tax and employee social security contributions (All-in rate).
The overall personal and corporate income tax (PIT+CIT) rate on dividend income reports the overall tax rate on distributed profit,
Taking into account taxation prior to distribution and at the household level, showing the highest rate.
Source: OECD Tax database.

29. Business R&D is highly concentrated in
pharmaceuticals and biotechnology
Danish companies among the world top 1000 R&D investors
2017 world ranking in parenthesis
Note: Annual R&D spending at the corporate group level. Pharmaceuticals and biotechnology companies in red.
Source: EU R&D Scoreboard data.
0 250 500 750 1000 1250 1500 1750 2000
GN STORE NORD(950)
WILLIAMDEMANT (890)
GRUNDFOS (702)
FERRING PHARMACEUTICALS (654)
VESTAS WIND SYSTEMS (487)
NOVOZYMES (468)
LEO PHARMA (441)
DANFOSS (383)
H LUNDBECK (330)
DANSKE BANK (287)
NOVO NORDISK (68)
EUR million

30. 0.0
0.1
0.2
0.3
0.4
0.5
0.0
0.1
0.2
0.3
0.4
0.5
FRA
BEL
IRL
KOR
HUN
AUT
GBR
USA
NOR
NLD
AUS
SVN
SWE
ISL
CAN
PRT
JPN
ISR
ITA
CZE
TUR
DNK
ESP
NZL
DNK
FIN
DEU
POL
MEX
LUX
CHE
GRC
LTU
EST
SVK
CHL
LVA
% of GDP% of GDP
Direct government funding of BERD Tax incentive support for BERD
Estimate after 2017 reform
Public support to business R&D is relative low
– even after reform
Direct government funding of business R&D and tax incentives for R&D,
2015 or latest available year
Source: OECD, R&D Tax Incentive Indicators.

31. 0
5
10
15
20
25
30
35
40
45
0
5
10
15
20
25
30
35
40
45
CZE
KOR
DEU
SVK
CHL
EST
AUT
CAN
ISR
ESP
POL
SVN
FRA
FIN
GRC
IRL
NZL
NOR
SWE
DNK
ITA
TUR
JPN
USA
AUS
NLD
The share of science (STEM) graduates is low
Tertiary educated adults with STEM
as a % of 25-64 year old non-students, 2015
Note: STEM refers to science, technology, engineering and mathematical subjects.
Source: OECD Survey of Adult Skills (PIAAC).

32. Labour market returns to ICT tasks – and skills in
general – are relatively low
0
5
10
15
20
25
0
1
2
3
4
5
ISR
TUR
DNK
GRC
ITA
FRA
SVN
NOR
POL
CHL
AUS
SWE
AUT
SVK
NZL
ESP
LTU
BEL
FIN
DEU
CZE
GBR
NLD
EST
CAN
IRL
JPN
KOR
USA
%%
Returns to ICT tasks¹ Returns to skills² (right scale)
1. Percentage change in hourly wages for a 10% increase in ICT task intensity. Labour market returns to task intensities are based
on OLS wage regressions (Mincer equations) using data from the OECD Survey of Adult Skills (PIAAC) (Grundke et al. (2018).
2. Percent increase in hourly wages for a standard deviation increase in numeracy. Data show the coefficients on numeracy scores
from country-specific regressions of log hourly wages (including bonuses) of wage and salary earners (in PPP corrected USD)
on proficiency scores standardised at the country level.
Source: OECD STI Scoreboard 2017; OECD Employment Outlook 2015.

33. Dependence on foreign workers has increased
substantially
Inflow of migrants with a work purpose
Source: Statistics Denmark.
0
5
10
15
20
25
0
5
10
15
20
25
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
ThousandThousand
EU non-EU

34. Strengthen incentives through the tax system
• Reduce top marginal tax rates on labour and capital
income
• Withdraw reduced inheritance taxation of family-owned
businesses
• Implement an allowance for corporate equity (ACE)
• Broaden public support to business R&D through well-
designed R&D grants and tax credits for incremental
R&D expenses
Recommendations to boost productivity growth (1)

35. Refining the competition framework
• Provide greater power to competition authorities to impose
administrative fines and structural remedies within
constitutional constraints
• Develop clearer standards for exemptions from the
Competition Act and involve competition authorities in their
determination
Ensuring supply of the right skills
• Strengthen incentives by reducing student grants for tertiary
education and relying more on students loans
• Assess whether current visa schemes for non-EU workers
sufficiently address skill needs and consider simplifying entry
procedures
Recommendations to boost productivity growth (2)

36. Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such
data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West
Bank under the terms of international law.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the
delimitation of international frontiers and boundaries and to the name of any territory, city or area.
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