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Despite generous welfare provisions and progressive disability policy, the Netherlands has one of Western Europe's highest rates of working-age adults on long-term sickness and disability benefits — a structural challenge that successive governments have failed to reverse.
Denmark's flexjob programme — a permanent wage-subsidy arrangement for people with reduced work capacity — is one of Europe's most expensive and extensive disability employment interventions. After two decades and €2+ billion in annual expenditure, the employment outcomes are more modest than the price tag suggests.
Sweden dramatically tightened its disability benefit system in 2008, cutting the caseload by nearly half within five years. But where did those people go? New evidence suggests a significant share moved into unemployment, social assistance, or informal care — not employment.
When you look beyond the official unemployment rate, approximately 30 million working-age Europeans are structurally outside the labour market — on disability benefits, long-term sickness, early retirement, or inactive. The fiscal cost exceeds €400 billion annually. This is the defining labour market challenge of the decade.
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