Recent Graduates in the Labor Market: The Efficiency Frontier of Higher Education Institutions

This study assesses the technical efficiency of higher education institutions in terms of labor market outcomes for recent graduates, employing a comparative analysis of three distinct methodological approaches. Using a sample of recent graduates of Colombian universities who earned their degrees between 2007 and 2011, we estimated the institutions' efficiency scores through Data Envelopment Analysis (DEA), the Free Disposal Hull (FDH) model, and Cazals et al. (Journal of Econometrics 106:1-25, 2002) order-m estimator. Our results reveal that the estimation technique affects the results when super-efficient decision-making units are present, with the order-m technique demonstrating superiority over DEA and FDH. However, in the absence of super-efficient institutions, the efficiency rankings obtained from all three methodologies exhibit consistency. This paper contributes to the literature by highlighting the importance of methodological selection in evaluating the labor market performance efficiency of higher education institutions when recent graduates' perspective is adopted.