1. Sara Johansson de Silva (World Bank)
Serbia Functional Review: Efficiency Analysis of the National Employment Service
1st Vienna Conference on Western Balkan Labor Markets
April 4 and 5, 2017
Sara Johansson de Silva (World Bank)

2. Vertical Functional Review of National Employment Services (NES)
Objectives
Help rationalize and improve the services of NES
Ultimately, improve labor market outcomes of NES beneficiaries
Approach
Data envelopment analysis (DEA): a benchmarking exercise used to evaluate efficiency in organizational units
Technical frontier/best practice
Questions of interest
Has the performance of PES changed? How?
How much room for improvement is there? What would be the pay-off?
Is size and geographic organization optimal?
What drives outcomes?
What specific activities appear to increase efficiency?
Title of Presentation

3. DEA of branch offices M3 ENVIRONMENTAL EFFECTIVENESS
INPUTS
[resource use by offices]
E.g. Expenditures on active measures, unemployment benefits, staff, real estate, maintenance, number of staff (counselors, registrars, admin) M1
EFFICIENCY
OUTPUTS
[activities by offices]
E.g. number of employers contacted, vacancies registered, profiles of unemployed created, participants in activities M2
IMPACT
OUTCOMES
[final goal]
Number of registered unemployed transitioning into formal jobs
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
Title of Presentation

4. Result 1: NES has became more effective
Shift “northwest” with time:
more jobs for same expenditures

5. Result 2: Most of the improvement is due to “technology”
Overall change in performance*
(%)
Catch-up
Frontier-shift
M1: how expenditures and staffing decisions result in activities like placements profiling, etc.
117
100
M2: how above activities lead to job placements
118
109
M3: how expenditures and staffing decisions lead to job placements
129

6. Result 3: But also some catch-up by poorer performing offices
Overall change in performance*
(%)
Catch-up
Frontier-shift
M1: how expenditures and staffing decisions result in activities like placements profiling, etc.
117
100
M2: how above activities lead to job placements
118
109
M3: how expenditures and staffing decisions lead to job placements
129

7. Result 4: Substantial savings and job gains from increased efficiency, impact, and effectiveness to “best practice”
Improving efficiency in activities
Expenditures on goods and services could be reduced by between 29 and 36 million RSD…
… At the same time, activities such as referrals, contacts with employers, profiles, could increase significantly
(e.g. between 1600 and 3000 additional contacts with employers)
Improving impact
# activities could be reduced significantly…
e.g. between 43,000 and 49,000 fewer profiles of unemployed created
… While between 31,000 and 53,000 additional jobs could be created
Improving overall effectiveness
Expenditures on goods and services could be reduced by between 48 and 53 million RSD…
…While between 24 and 34,000 additional jobs could be created
INPUTS
[resource use by offices]
E.g. Expenditures on active measures, unemployment benefits, staff, real estate, maintenance, number of staff (counselors, registrars, admin)

8. Result 5: More work is needed on improving final outcomes
Branch offices are more efficient in how they use inputs to
undertake activities (m1) than in the outcomes of these activities (m2).
Title of Presentation

9. Result 6: Merging branch offices would not increase efficiency significantly
Title of Presentation

10. Result 7: Jobs outcomes depend greatly on qualitative and environmental factors- so there is a need to adapt policy mix to circumstances
Title of Presentation

11. Effect of one additional unit on the number of jobs
Result 8: More counselors and links with employers have the strongest effects on jobs placements
Outputs
Effect of one additional unit on the number of jobs
#contacts with employers
2.55
#contacts with unemployed
0.73
#profiles
0.08
#referrals
0.11
#vacancies
0.26
Inputs
Effect of one additional unit on the number of jobs
#active measures on education/employment
1.56
#counselors
144.99
#other staff
50.26
Title of Presentation

12. What can branch offices take away from this exercise?
Check ranking and results for activity efficiency, impact, and effectiveness in 2012, 2013, and 2014
What is going well? Where are the weaknesses (if any)?
Check developments over time ( )
Has effectiveness improved or worsened? In what areas?
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 to the environment
E.g. few job opportunities: contacts with employers (not helpful?); training, job search assistance and mobility assistance for other regions?
Learn from relevant peers
Title of Presentation

13. Best practice peers: use same mix of input and output but with higher effectiveness in job placements (with respect to inputs)
Office
Potential Peer Offices
Za Beograd
Novi Sad, Leskovac and Subotica
Sremska Mitrovica
None!
Kragujevac
Leskovac, Zrenjanin and Novi Sad
Subotica
Niš
Leskovac
Uzice
Leskovac and Pirot as
Novi Sad
Kragujevac, Sremska Mitrovica, Pirot, Zrenjanin Leskovac and Subotica
Cacak
Zrenjanjin and Pirot
Bor
Zrenjanin, Pirot and Loznica
Sabac
Zrenjanjin and Leskovac
Valjevo
Pirot and Leskovac
Zajecar
Subotica and Pirot
Vranje
Jagodina
Zrenjanjin and Lescovac
Zrenjanin
Pirot
Kikinda
Sremska Mitrovica and Pirot
Prokuplje
Kraljevo
Zrenjanin, Leskovac and Loznica
Smederevo
Zrenjanjin
Krusevac
Zrenjanin and Pirot
Novi Pazar
Loznica
Leskovac, Prijeploje and Prokuplje
Pancevo
Projepolje
Zrenjanjin, Sremska Mitrovica and Pirot
Pozarevac
Vrsac
Sombor
Title of Presentation

14. Thank you! Sara Johansson de Silva sjohansson@worldbank.org