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Benchmarking Efficiency of Public Employment Services: Vertical Functional Reviews

This study analyzes the efficiency of Public Employment Services (PES) in five Western Balkan countries using a Vertical Functional Review and Data Envelopment Analysis (DEA). It aims to improve PES services and identify best practices within countries.

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Benchmarking Efficiency of Public Employment Services: Vertical Functional Reviews

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  1. Benchmarking the efficiencyof Public Employment Services:VerticalFunctional Reviews Sara Johansson de Silva, World Bank Alexander Schnabl and Hannes Zenz, Institute for Advanced Studies (IHS) Vienna, March 20, 2017

  2. Objectives • Help improve the services of PES • Analyses for five Western Balkan countries • Approach • Vertical Functional Review – regional branch offices • Data envelopment analysis (DEA): a benchmarking exercise used to evaluate efficiency in organizational units (multiple inputs and multiple outputs possible) • Bench marking within countries • DEA defines best practice within countries: best possible combination of inputs/outputs defined by existing branch offices VerticalFunctional Review (DEA Analysis)

  3. DEA of the Public Employment ServicesEffectivnessdepends on efficiency, impact, environment ENVIRONMENTAL Outside the purview of office, e.g.: Number of unemployed in area, formal jobs in area, geographic size, average wages, skill levels of unemployed EFFECTIVENESS

  4. Productivity Frontier (CRS) To be 100% efficient is to be on the ProductivityFrontier (here: offices P1-P4) What is the DEA method? ProductivityFrontier (VRS)

  5. The DEA in two dimensions: Case loadmatters, butthereareefficiencygains to be made A B C

  6. Did overall efficiencyimprove or worsen over time? • Why? ”technicaldevelopment”, or catch-up? • Aretherelarge variations between different offices? • Whichonesperformwell, whichonesdon’t? • Wouldgeographicalreorganizationchangeefficiency? • Where do problems (ifany) arise? • Howefficiently inputs produceactivities? • To whatextenttheseactivitiesresult in jobsplacements? • Potential gains from improving overall effectiveness to ”best officelevel” • Howmanymorejobsplacementswith same input or activities? • Whatwould be the effect on jobsplacementsofincreasing input or activities • Whatofficescould serve as peermodeloffices for others? • Takingintoaccount the office-specific combination of inputs/outputs Whatcanwelearn from the analysis? For example…

  7. Did overall efficiencyimprove?

  8. In Albania, significant variation betweenoffices In Serbia, less so Aretherelarge variations betweenoffices?

  9. Shkodër Devoll Where do problems (ifany) arise?

  10. Potential gains from improvingefficiency Improvingoutcomes Reducingresources

  11. Check office results for activity efficiency, impact, and effectiveness over time • What is going well? Where are the weaknesses (if any)? • Could any changes depend on changes in resource use/mix and quality of activities/external factors? • Reflect on composition of input (e.g. staff) and activities • How to best adapt the mix of activities and increase quality given the environment • Learn from relevant peers • Recall – best practice within countries only! Take-aways for branchoffices

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