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INPUT UTILIZATION: LABOUR AND HUMAN CAPITAL IN EUROPE
Abstract
After the global crisis, the attention paid to resource utilization and cost efficiency have been an issue in a massive body of research. On the macroeconomic level, one could be interested in efficiency of the transformation of standard inputs capital and labour into an output, usually GDP. Non-parametrical way of productivity analysis helps to avoid assumption as to specific type of production function building deterministic production frontier. In the paper, data envelopment analysis approach is employed to determine labour input utilization assuming labour to be a variable input in a short run, capital stock being fixed during the period. The adopted measure of resource utilization exploits a change in the efficiency after relaxing the constraint associated with the variable input. Two modifications of the model were computed – with a labour measured in employed persons and as a human-capital-augmented labour. The results show relative underutilization in either type of labour across most of the European countries in 2010.
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