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Benchmarking European labour market performance with efficiency frontier techniques

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  • Storrie, Donald
  • Bjurek, Hans
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    Abstract

    The issue addressed in this paper is how to obtain a composite measure of several indicators using benchmarking principles. While the exposition is only in two dimensions, and thus can be presented graphically, this is sufficient to capture the essence of the methodology and provide the basis for a critical examination of the assumptions. The data used is labour market statistics for the Member States of the European Union. The proposed approach comes from a technique originally used in production theory, namely efficiency frontiers. Here, however, we benchmark not efficiency but performance. There are two main problems. First, related to composite measures, how does one compare (weigh) indicators that are not obviously comparable? Second, related to benchmarking, how does one benchmark countries that may differ considerably as regards the mix of the various indicators. Both these issues concern weights and require that the weighting system should be parsimonious as regards assumptions and flexible, in that not all countries should necessarily be awarded the same weights. -- In der Analyse wird gezeigt, wie ein Gesamtindikator aus Einzelindikatoren konzipiert werden kann, die auf der Basis von Benchmarking-Kriterien entwickelt worden sind. Obwohl sich der Ansatz auf (nur) zwei Parameter beschränkt - und er so graphisch darstellbar wird - ist dies ausreichend, um den Kern des methodischen Ansatzes erfassen und kritisch überprüfen zu können. Die verwendeten Daten sind Arbeitsmarktstatistiken der EU-Mitgliedstaaten. Der vorgeschlagene Ansatz wurde ursprünglich in der Produktionstheorie verwendet, insbesondere zur Ermittlung der „vordersten Effizienzgrenze“ (frontier). In der vorliegenden Analyse wird allerdings nicht die Effizienz, sondern die Leistung (performance) gemessen. Es stellen sich hauptsächlich zwei Probleme. Das erste Problem hängt mit dem Charakter von Gesamtindikatoren zusammen: Wie sollen Indikatoren gewichtet und verglichen werden, die nicht auf den ersten Blick vergleichbar sind? Das zweite Problem bezieht sich auf das Benchmarking: Wie können sehr unterschiedliche Länder durch einen Mix sehr unterschiedlicher Indikatoren vergleichend gemessen werden? Beide Aspekte beziehen sich auf Gewichtungsprobleme und erfordern, in den Gewichtungsprozeß möglichst wenige (normative) Annahmen einfließen zu lassen und das „Gewichtungssystem“ so flexibel zu konzipieren, daß nicht allen Ländern automatisch das gleiche Gewicht zugemessen wird.

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    Bibliographic Info

    Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Labor Market Policy and Employment with number FS I 00-211.

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    Date of creation: 2000
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    Handle: RePEc:zbw:wzblpe:fsi00211

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    Cited by:
    1. Martínez Roget, Fidel & Murias Fernández, Pilar, 2011. "Pension Systems And Economic Well-Being Of Older People: A Synthetic Indicator For The Oecd Countries," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 20(ex).
    2. Martínez Roget, F. & Murias Fernández, P. & Miguel Domínguez, J.C. De, 2005. "El análisis envolvente de datos en la construcción de indicadores sintéticos. Una aplicación a las provincias españolas/DEA Construction of Composite Indicators. An Application to the Spanish Pro," Estudios de Economía Aplicada, Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 23, pages 753-771, Diciembre.
    3. Laurens Cherchye & Wim Moesen & Nicky Rogge & Tom Van Puyenbroeck & Michaela Saisana & A. Saltelli & R. Liska & S. Tarantola, 2006. "Creating Composite Indicators with DEA and Robustness Analysis: the case of the Technology Achievement Index," Public Economics Working Paper Series, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics ces0613, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
    4. Gebel, Michael, 2006. "Monitoring und Benchmarking bei arbeitsmarktpolitischen Maßnahmen," ZEW Dokumentationen, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 06-01, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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