Denmark's stricter requirements cut refugee employment rates

Low-skilled refugees have been pushed further away from the labour market after Denmark tightened permanent residency rules.

That is the conclusion in a report from the Rockwool Foundation in cooperation with University College London. It looks at what happened after Denmark introduced stricter rules in 2007 for who can get permanent residency as a refugee. 

The then centre-right government, with support from the right-wing Danish People’s Party, decided refugees had to live in the country for two years and work full time for two and a half years before gaining permanent residency. Demands for language skills were also increased considerably.

This stricter policy's aim was to motivate more refugees to learn Danish and to work, but the Rockwool Foundation’s report shows the opposite happened. Employment levels among low-skilled refugees fell by nearly one third, while the employment levels among skilled refugees fell by 7%. 

When Denmark introduced new conditions in 2007 for obtaining a permanent residence permit, it was a goal that refugees were further motivated to work and learn Danish. But it had the exact opposite effect. Employment falls by an average of 0.09 years of full-time employment each year, a reduction of 31 percent. Source: Rockwool Foundation.

The report also shows that more stringent language requirements had no effect on low-skilled refugees’ knowledge of the Danish language. More skilled refugees passed the language test at a higher level, yet employment levels fell for this same group. The researchers interpret this as a sign that skilled refugees chose not to work in order to spend more time improving their Danish, with a view of gaining permanent residency. 

Unrealistic demands

Even though the report covers events from 14 years ago, important lessons can be learned, according to the Fund – politicians cannot motivate refugees to find work and learn Danish by increasing requirements if these requirements are impossible to meet. On the contrary; this will demotivate people and have the opposite effect.

“The unintended consequence of the 2007 reform illustrates that policies that are aimed at improving refugee immigrants’ skill acquisition by rewarding a specific performance will be effective only if the bar is set at an appropriate level. If the requirements are deemed too costly to fulfill, the reform could be ineffective or result in disincentive effects. This is a particular concern for populations that are badly prepared for the host country’s labor market,” writes the Rockwool Foundation. 

Since 2007, permanent residency rules have been further tightened through several political agreements. Refugees who are given asylum in Denmark now, get temporary residency rights during which they can apply for permanent residency, usually after eight years. If the situation in their home country improves before this time, their residency permit can be revoked.

To get permanent residency you also have to have been in full-time employment for at least three years and six months during the past four years, and pass a Danish exam on a fairly high level.

All refugees to Denmark are offered a three-year-long integration programme where a Danish language course plays a central part. There are three levels depending on the participants’ education and skills. Before 2007 it was enough to pass level one. After 2007, Danish language requirements were increased so that refugees had to pass level two or three, which means having relatively good language skills. 

No to changes

The Danish Refugee Council has warned that many legal changes and increased requirements for permanent residency mean some refugees and their families live in Denmark for many years with no secure future there. This has a negative impact on the refugees’ desire for social participation, learning the language and committing to the labour market, according to the Refugee Council.   

The Danish parliament’s largest parties, the Left and the Social Democrats, have no interest in easing the demands for permanent residency, even though the new report from the Rockwool Foundation indicates that this might motivate more refugees to find work and learn Danish. 

“I can guarantee that we will not vote for anything that makes it easier to get permanent residency in Denmark,” the Left’s immigration spokesman Mads Fuglede told the Kristeligt Dagblad newspaper when asked to comment on the report.

In a 2018 report, the Rockwool Foundation compared the requirements for permanent residency in Denmark, Norway, Germany and the Netherlands. Several of these countries have tightened requirements for how long refugees can stay, their language skills and employment, but Denmark’s demands are the toughest, according to this report.