The Evaluation of Active Labour Market Policies
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The Evaluation of Active Labour Market Policies

Measures, Public Private Partnerships and Benchmarking

Edited by Jaap de Koning

This book argues that active labour market policies are necessary to improve the position of the unemployed but have so far performed relatively poorly. The contributing authors seek ways to improve active labour market policy and consider three means of doing so: improving the quality by better targeting and by better-designed measures, more efficient implementation and delivery, and better performance by benchmarking the various implementation agencies involved.
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Chapter 14: Does Quality Matter? Analysing the Effect of Omitted Variables on Optimal Scale: An Application to Swedish Employment Offices

Jonas Månsson


14. Does quality matter? Analysing the effect of omitted variables on optimal scale: an application to Swedish employment offices* Jonas Månsson 1 INTRODUCTION The aim of this contribution is to investigate what effect omitting quality will have on policy recommendations regarding the optimal scale of production of employment office services. The reason for choosing the omission of quality indicators as the study object is the increasing emphasis on quality aspects in service sector production. In recent years, developments in the service sector have been characterized by structural change. In Sweden, mergers have been used as a tool to reduce inefficiency in the postal and banking sectors for instance. The underlying hypothesis has been the belief in economies of scale in the production of these services. Critics of merger policy claim that some of the alleged inefficiency can be explained by the superior quality of the outputs from the smaller units, and that mergers result in deterioration in quality. Others claim that the increased size of production units in the sector increases efficiency without changing the quality of the service. Despite the importance of the issue, only a few studies have explicitly included measures of quality in computations of efficiency (see eg Parkan (1987); Fixler and Zieschang (1992); Färe et al (1996)). Policy implications that can be derived from studying scale elasticity and scale efficiency relate to the way the scale of production can be changed to make it e...

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