United States vs. Denmark, in 17 Charts

By Matt Bruenig

October 15, 2015 "Information Clearing House" - "Demos" - Denmark played a surprising role in Tuesday's Democratic debate. Here is how the country stacks up the US on a number of important social indicators.

The Poor

Here are the overall poverty rates for the two countries:

Here are the child poverty rates for the two countries:

Lest you think I am pulling some kind of "relative poverty" trick, here is per-capita income of the 5th, 10th, and 20th percentiles in Denmark and the US, displayed in 2005 PPP-adjusted dollars:

This measure will tend to understate the standard of living in Denmark as well because it only includes cash and cash-like benefits, but does not include public services provided in kind such as free college, free/subsidized child care, and free health care.

Here is the same graph, but for per-capita income of children, a population Denmark focuses special welfare attention on:

Inequality

Here is the level of inequality in each country, as measured by the Gini coefficient:

Under this measure, Denmark is the most equal country in the world. Among countries for which there is OECD data, the US is the third most unequal behind Turkey and Mexico.

Health Care

Here is the percentage of citizens lacking health insurance in the two countries:

Paid Parental Leave

Here are the number of weeks of publicly-funded paid parental leave you receive for the birth of a child:

Guaranteed Vacation

Here are the weeks of guaranteed vacation you receive each year:

Work Hours

Here are the average hours worked by workers:

More leisure, more time with friends and family.

Welfare Expenditures

Here are welfare expenditures overall and on certain topics as a percent of GDP. Welfare expenditures are defined here as public social expenditures, per the OECD:

This is the sort of stuff that gets the low-poverty, low-inequality goods. Most of the categories are self-explanatory. ALMP refers to active labor market policies. These are policies like public employment services, retraining, and employment subsidies that help unemployed people get back into work. Denmark spends twice as much on ALMP than the US spends on unemployment benefits and ALMP combined.

Employment Rates

Here are the percentage of prime-age people (ages 25-54) who are employed in the two countries:

Denmark is ahead overall, among males, and especially among females. It turns out generous welfare is compatible with high employment levels. Perhaps spending 2.2% of your GDP on active labor market policies and providing robust child care and paid leave benefits can actually make it easier for people to remain in the labor force.

Taxes

How do you afford all these great welfare benefits and the low poverty and low inequality that they bring. You levy taxes of course. Here is government revenue as a percent of GDP:

At 56% of GDP, Denmark's government revenue is the highest in the world.

Government Debt

Here is government debt as a percent of GDP and government financial networth (government financial assets minus government financial liabilities) as a percent of GDP:

Growth

Comparing growth can be difficult because different countries make different labor/leisure trade offs. Denmark is much more likely to use its growth gains to reduce the amount of work they do than the US is. The best way to account for growth in a way that is sensitive to differences in labor/leisure decisions is to track it in terms of GDP per hour worked (as I discussed earlier). Here is the cumulative percent change in GDP per hour worked (using 2005 $PPP):

Innovation

Directly measuring innovation is a tricky (and arguably impossible) thing to do. Nonetheless, Denmark does quite well on common innovation indicators.

Here is the number of triadic patents (patents filed in the US, EU, and Japan) per million inhabitants:

Here is venture capital as a percent of GDP:

Here is the number of researchers per 1000 employees:

There is more, but I won't bore you. Generally, innovation indicators show Denmark do as well or slightly better or slightly worse than the US. Overall, I'd say it's a wash.

Can We Do It Here?

People claim we can't do this sort of thing here, but their arguments are fairly unpersuasive. There is good reason to think we won't do it here for political reasons and for reasons having to do with the fact that whites in the US generally don't want to improve the well-being of Blacks and Latinos, and this turns them off from high taxes and welfare. But if you put that political question aside, the policy side of things is not that complicated.

The US is bigger than Denmark by a lot, but with its larger size also comes a larger national income. On a per-capita basis, the US actually has quite a bit more national income than Denmark (in 2005 $PPP). So we don't lack for the income necessary to fund a Denmark-like system.

The US has shown itself to have a good ability to administer tax systems. Unlike some large states where the central government has a difficult time exerting itself in the hinterlands, it appears the US government has been quite able to collect taxes from all over the country. It also has a lot of room available in its tax level (as indicated by the taxes section above).

Finally, the US has shown itself to have a good ability to administer welfare systems. As Michael Calderwood notes, the US Social Security Administration alone sends out 59.5 million checks per month, a number which is greater than the entire Nordic population combined (Denmark, Finland, Norway, Sweden). If anything, the larger size of the US should make it easier to implement Nordic-like systems because economies of scale should reduce the per-capita administrative costs of running the welfare programs.

Conclusion

So, in total, Denmark is a low-poverty, low-inequality, high-income, high-tax, high-welfare, high-innovation, high-employment country that has generous time off for vacations and newborns and has a relatively high amount of leisure time for workers. The US could easily move in the Danish direction, and it would be a big improvement for poor and working people if it did so, but given the toxic politics of the country, I wouldn't expect it any time soon.