Denmark, like other Scandinavian countries, is a modern 'welfare state' with comprehensive public responsibility for the social well-being of the individual. But how does the existence of an economic 'safety net' affect the labour supply? Are there fewer incentives for the unemployed to seek work? Does the incentive structure of the welfare state encourage 'black' work, tax evasion and do-it-yourself activity? These are some of the questions addressed by an extensive research project sponsored by the Rockwool Foundation. The results are presented in this volume, providing a detailed insight into the relation between the social legislation of the welfare state on the one hand, and the behaviour of the labour force on the other. Although based on a study of the Danish experience, the findings presented here should be important to any discussion of the modern welfare state.