The DEA Method and Its Application Possibilities for Measuring Efficiency in the Public Sector—The Case of Local Public Employment Services

Abstract

Public Employment Services (PES) are identified as important institutions in the process of improving the match between supply and demand in the labor market, which, despite their importance, still do not achieve the desired efficiency. The indicated problem is partly due to the lack of appropriate evaluation methods for the applied labor market policy instruments. This paper aims to verify the possibility of using the two-stage Data Envelopment Analysis (DEA) method in measuring the efficiency of public sector entities. The authors focused on 39 PES operating in Mazovia province, Poland in 2019. In the first stage, the model of technical efficiency of local PES included six variables (four inputs and two outputs). Only seven PES obtained full efficiency. The inefficiency of analyzed PES varied from about 1% to 80%. In the second stage, the attention focuses on the relationship between true unknown efficiency and its determinants (five environmental variables, both demand and supply oriented). Then, the regression coefficients and confidence intervals showed that three out of five variables influence the efficiency results, the share of the long-term unemployed, the share of the unemployed under 30, and the share of the unemployed over 50 in the total number of unemployed.

Active Labour Market Policies for Rural NEETs in Lithuania: A Case of Rural Municipalities

“…The measurement of the effectiveness of PES is part of the evaluation of ALMP. Cichowicz et al (2021) stated that the effectiveness of PES is linked to the conditions in the country in which these units provide services. They used the financial and human resources of PES as inputs; the outputs are outflow from unemployment due to starting work and taking a job.…”

“…They used the financial and human resources of PES as inputs; the outputs are outflow from unemployment due to starting work and taking a job. Cichowicz et al (2021) found that the employment offices included in the analysis had a significantly diversified efficiency level as they operated under certain environmental circumstances. Koning (2009) analysed the effectiveness of the Dutch PES workers using the job placement rates of benefit recipients, the impact of these workers on the benefit denial rate of unemployment insurance and social assistance schemes, and the role of the PES in attracting and registering vacancies and found that a higher worker/client ratio at offices increases the outflow rates for short-term unemployed.…”

Regional Differences, Distribution Dynamics, and Convergence of the Green Total Factor Productivity of China’s Cities under the Dual Carbon Targets

“…Most existing research on measuring public sector efficiency in a socioeconomic system have been conducted in two ways: One is by constructing comprehensive indicators to measure the efficiency, including the public sector efficiency index in policy areas of administration, education, infrastructure, and so on [14], and public service technology efficiency through the supplier and customer satisfaction opinion index [15], a comprehensive index combining the expenditure efficiency index and income efficiency index [16]. The other is using the DEA model to measure efficiency, such as the research and development efficiency of public and private sectors in EU countries [17], the Indian banking system's efficiency [18,19], 39 public sector entities operating efficiency in the province of Poland [20], and the effect of accrual accounting on efficiency of the state of Bavaria in Germany [21].…”

Green Transition and Gender Bias: An Analysis of Renewable Energy Generation Companies in Latin America

“…6. Efficiency is defined as a weighted sum of outputs divided by a weighted sum of inputs, where all efficiencies are restricted to rest between zero and one (Cichowicz et al, 2021).…”