Assessing the Efficiency of Welfare Spending in Slovenia with Data Envelopment Analysis

Abstract

JT03341873Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. ECO/WKP(2013)50 Unclassified English -Or. English ECO/WKP(2013)50 2 ABSTRACT/RÉSUMÉ Assessing the efficiency of welfare spending in Slovenia with data envelopment analysisThis paper derives estimates of the efficiency of welfare spending in Slovenia and the other OECD countries from data envelopment analysis based on model specifications used in earlier OECD studies. Results suggest that Slovenia ranks about 25 th among OECD countries for output efficiency: for a given level of spending outcomes fall short by around 3.5% in health care, by 10% in secondary education and by around one third in public administration. Results also suggests that Slovenia ranks 18 th to 27 th in the OECD for input efficiency as the same outcomes could be reached by scaling back costs by around half. Alternatively, spending increases could be contained and outcomes improved by increased cost efficiency. Statistical uncertainty surrounding input efficiency estimates is high for countries with the smallest scope for potential savings. Confidence intervals around output efficiency scores are also wide for some emerging market economies.JEL Classification: C14, I18, I28, I38, H83

Fiscal challenges and inclusive growth in ageing societies

“…Furthermore, as mentioned above, ageing holds potential to spur increased R&D to find technology solutions to labour shortages, as well as to respond to the needs of older individuals, including in health-related technology and robotics. 2…”

“…Children born into poorer families are more likely to experience poor health and worse learning outcomes, and are less likely to attain higher education degrees and succeed in the labour market (OECD, 2017 [1]). In turn, people with low quality jobs, unstable careers and lower incomes tend to have less access to health services, and are less likely to retire with adequate income from pension systems and 2 Outcomes may diverge across industries, those more amenable to automation being better prepared to cope with the impacts of ageing (Acemoglu and Restrepo, 2018[4]). The ability of economies to offset the consequences of declining employment ratios through investment may also depend on other long-term macroeconomic developments, notably whether the constraint of the zero lower bound becomes frequent and prevents the downward adjustment of real interest rates necessary for capital deepening (Eggertsson, Lancastre and Summers, 2018[94]), and on the responsiveness of investment to changes in interest rates.…”

Determinants of Public Health Care, Education and Administration Efficiency in Central, Eastern and South Eastern Europe

“…Determinants of Public Health Care, Education... 19(4), They used the share of expenditure on general government employees' salaries in GDP as the input variable and government effectiveness, regulatory quality, rule of law, efficiency of the legal framework in settling disputes, and the number of days required to start a business as the output variables. Hribernik and Kierzenkowski (2013) conducted a DEA analysis on a sample of 29 OECD countries with a particular focus on Slovenia. They constructed a composite public administration outcome indicator, using data on the quality of justice, level of corruption, government inefficiency, bureaucracy, and the level of administrative burden.…”

Vulnerability of Social Institutions

“…Over the long run, the main source of vulnerability relates to the main drivers of spending, which are ageing, income, and price and technology developments (de la Maisonneuve and Oliveira and Martins, 2013). Policy improvements could make health care systems more robust to shocks and help bringing about the large health care efficiency gains estimated in previous OECD studies (Joumard et al, 2010 andHribernik andKierzenkowski, 2013). Efficiency savings could offset future spending pressures, therefore counteracting the effect of adverse long-term trends.…”

“…The adoption of best practices (Box 7) could yield sizable public health care savings (Pisu, 2014 discusses reform options in more detail). According to the latest OECD efficiency estimates (Hribernik and Kierzenkowski, 2013), OECD countries could lower health care spending by about a third, while maintaining the same health outcomes. Achieving such efficiency gains could significantly help in curbing public health care spending pressures in the coming years.…”