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Do the Danes want their holiday allowance?

July 3rd, 2020

Every fifth Dane does not want their frozen holiday allowance disbursed. This can have consequences for consumption and can cost thousands of Danes their jobs.

In Denmark it is no news that the government has chosen to allow the Danes to get their frozen holiday allowance paid in the autumn. What is remarkable, however, is that there is a large proportion who wants to leave the money in their account.

A new study by Userneeds in collaboration with Moos-Bjerre shows that every fifth Dane does not want to have their holiday allowance disbursed. Although 68 percent of the one thousand respondents have stated that they want to get their holiday allowance paid this year, the chief economist of the Danish Business (DE) Tore Stramer, is still concerned about the remaining Danes who have replied that they do not want their holiday allowance, as well as the 13 percent who have not yet decided what to do.

Although only 18 percent have replied that they do not want their holiday allowance disbursed, it is, according to Tore Stramer, still possible that the desired consumption effect is not achieved.

The purpose of the disbursement of the frozen holiday allowance is to get the Danes to spend the money so Denmark can get out of the economic crisis caused by corona. With the many workplaces that are suffering during the crisis, it is important to push consumption again, as many Danes risk losing their jobs.

The holiday allowance adds up to 33 billion DKK after taxes, if everyone wants their money disbursed, and this amount can help save 16,000 jobs. Instead, it is 4,000 fewer if only every fifth Dane does not get their holiday allowance disbursed.

There is no doubt that it will have an effect on consumption if a large part of the Danes choose not to receive their holiday allowance. But it remains uncertain whether the Danes need the money at all in the end. According to economics professor Phillip Schröder, from Aarhus University, the corona crisis has differed from other crises and he does not believe that the Danes’ ability to pay is the problem, as several have had the opportunity to save money during the crisis.

The numbers have prompted Finance Spokesman Troels Lund Poulsen (V) to reconsider whether further action is needed in connection with the disbursement of the Danes’ holiday allowance.

Read about it in the Danish article from Børsen here.