Returning long-term Sick-Listed to Work

The Danish policy towards work-disabled persons seems to comprise contradictory forces. On the one hand, the state seeks to enhance labour market integration of work-disabled persons through vocational rehabilitation. On the other hand, lax job protection legislation makes it easy for employers to dismiss sick-listed employees. This paper assesses the effect of these two policy aspects simultaneously. In contrast to previous studies, we distinguish between returning to work with the old employer and a new employer.
We conclude that the Danish policy through its lax job protection legislation facilitates a flexible labour market, but an important drawback seems to be that many sick-listed employees loose their labour market attachment.