Surveys suggest that Denmark ranks close to or slightly above the OECD average in terms of student and adult skills, even though Denmark spends more than many OECD countries on education, labour market policies and adult learning. Sluggish productivity growth over the past two decades raises the question of how to develop better skills and use them more efficiently to achieve stronger and more inclusive growth. Improving the performance of compulsory and tertiary education would help all students acquire the right skills. Ensuring adults upgrade their skills is another key challenge, which involves strengthening the adult learning system. Reforms of taxation and of the wage setting system in the public sector would promote a better allocation of skills economy-wide. Finally, to activate skills more broadly, reforms to raise labour market participation should continue and the efficiency of active labour market policies will have to be increased further. This Working Paper relates to the 2013 OECD Economic Survey of Denmark (www.oecd.org/economic-surveydenmark. htm).