Selection of Strategies for Increasing Labor Market Efficiency Using Multi-Criteria Evaluation: The Case of the Republic of Croatia

Abstract

Labor market efficiency represents a multidimensional public policy problem that requires the simultaneous consideration of institutional, structural, as well as technological and dynamic factors. The aim of this paper is to identify and rank the strategies that, according to expert evaluation, contribute most to the long-term efficiency of the labor market of the Republic of Croatia. For this purpose, a multi-criteria evaluation model was developed, encompassing eight criteria and eight strategies identified on the basis of the relevant theoretical and empirical literature. The evaluation was conducted based on the assessments of nine experts from the academic community who deal with labor market issues. The fuzzy Modified Simple Weight Calculation (fuzzy M-SiWeC) method was applied to determine the relative importance of the criteria, while the ranking of the strategies was carried out using the fuzzy COmpromise Ranking from Alternative Solutions (fuzzy CORASO) method. The results show that technological adaptability and innovation incentives represent the most important evaluation criterion, whereas the reform of education and lifelong learning is the highest-ranked strategy for increasing the efficiency of the Croatian labor market. This is followed by active employment policies based on data analytics. The obtained results point to the need to direct Croatian labor market policies towards the systematic alignment of education and lifelong learning with labor market needs, as well as the development of active employment policies based on data analytics.