The Public Employment Service: A Survey of Cost-Benefit Analysis and Productive Efficiency Analysis Studies
2013 (English)Report (Other academic)
Public employment services’ operations will be massively and profoundly influenced by changes on both the supply and the demand side of the labour market and by such structural impediments as, for example, mismatch between labour demand and supply and low participation rates among vulnerable disadvantaged groups. Rapid and targeted mediation is considered to remain essential for PESs but it has to be combined with attention to provide transitions for individuals facing redundancy and career building. PESs should help job seekers adopt long-term career perspectives, stimulate them to enhance their competencies, give career guidance, give workers support to make smooth career transitions, as well as working with employers to ensure they meet their requirements and encourage and support them to provide career opportunities to more disadvantaged individuals. PESs have to develop their organisation and methods to efficiently and effectively respond to the changing needs in society and the labour market. Far-reaching changes in the tasks, organisational structures, and methods in PESs present corporate governance with great challenges—exacerbated by reduced budgetary resources. The pathway of change that has to be managed will be dotted with demands on decision-makers to choose between alternative courses of action. One of the main thrusts of this paper is to describe cost-benefit analysis, CBA, as a tool to assist decision-makers in choosing. CBA is a tool that judges alternatives in terms of their efficiency as regards the realisation of social objectives, which means that CBA allows policy makers to judge alternatives by their allocative efficiency. This requires taking into account the costs and benefits of the alternatives under consideration. The other main subject of the paper is about measuring productive efficiency which occurs when at a given cost the highest possible output of one service is produced, given the production level of other services. Such measurements make it possible to compare the productive efficiency of individual employment offices or to make comparisons in that respect between PESs in different countries. Therefore, measurements of productive efficiency can be the basis of actions to improve production and managerial processes. Examples of cost-benefit analyses of PES projects and productive efficiency analyses of PESs are given in the paper. The remainder of this paper is organised as follows: Section 1 opens with a brief sketch of changes in the governance in EU PESs during the last decades. This is followed by an accounting framework addressing both efficiency and distributional aspects of employment services. Section 2 begins with a condensed description of basic principles of cost-benefit analysis which is followed by a review of a number of economic analyses concerning employment services that have been carried out in EU countries. Section 3 is devoted to methods to measure the productive efficiency of individual employment offices and of the PES in one country in relation to productive efficiency of PESs in other countries. It starts with brief overviews of the theory of production and of methods to measure efficiency. Then it presents a review of previous studies and a description of the production of employment offices. This section concludes with the development of a benchmarking model for European employment offices. Section 4 provides concluding remarks.
Place, publisher, year, edition, pages
Linnéuniversitetet , 2013. , 23 p.
Working paper series / Linnaeus University Centre for Labour Market and Discrimination Studies, 2013:12
Research subject Economy, Economics
IdentifiersURN: urn:nbn:se:lnu:diva-31087OAI: oai:DiVA.org:lnu-31087DiVA: diva2:677253