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Matching frontiers: A random parameter model approach

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  • Baños, José F.
  • Rodríguez-Álvarez, Ana
  • Suárez, Patricia

Abstract

This paper models the efficiency of labour offices belonging to the Public Employment services (PESs) in Spain using a stochastic matching frontier approach. With this aim in mind, we apply the random parameter model approach (Greene, 2005) in order to control for observed and unobserved heterogeneity. Results indicate that when we analyse the goodness of fit of the estimates we found that it improves by controlling both, observed and unobserved heterogeneity in the inefficiency term. Also, results suggest that counsellors improve the productivity of labour offices and that, the share of unemployed skilled persons, unemployed persons aged 44 or younger, as well as the share of unemployed persons in the construction sector, all affect the technical efficiency of PESs offices.

Suggested Citation

  • Baños, José F. & Rodríguez-Álvarez, Ana & Suárez, Patricia, 2016. "Matching frontiers: A random parameter model approach," Efficiency Series Papers 2016/07, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    • Handle: RePEc:oeg:wpaper:2016/07
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    References listed on IDEAS

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