Benchmarking Labour Market Performances and Policies

Abstract

The recent EU initiatives on employment policy and the “Luxembourg employment strategy” underscore the relevance of benchmarking as an instrument for improving labour market performance and labour policy effectiveness. This paper presents the major results of a research project aimed at exploring the application of benchmarking techniques to convergence between the European labour markets. After synthetically describing the development of benchmarking techniques in the private and the public sectors, the paper addresses the crucial question of defining labour market performance and presents the possibility of creating labour market performance and policy benchmarks through the construction of efficiency frontiers. A second possibility explored is the radar‐chart approach, a presentation technique that allows both for single dimension and overall performance monitoring. The paper then faces the problem of broadening the scope of benchmarking from the identification of benchmarks to the understanding of performance gaps through more comprehensive analytical tools. In this area, useful contributions are provided by the employment systems and the transitional labour markets approaches. The concluding section stresses the role of normative decisions, as well as the possible political challenges implied by a thorough application of benchmarking techniques to labour market convergence.