An Application of Data Envelopment Analysis and Malmquist Productivity Index in the Development of Human Capital of ASEAN-5 countries

Abstract

This work highlights the support of some indicators, which are assumed to be resources, namely mobile usage, internet usage, private credit, government education expenditure, and the export of high-technology products, for human capital development. To investigate the efficiency and productivity of creating human capital, the methods of Data Envelopment Analysis (DEA) and the Malmquist Productivity Index (MPI) are applied to the 2017 data, 2018 data, and 2020 data of the selected ASEAN-5 countries, namely Indonesia, the Philippines, Vietnam, Thailand, and Malaysia. It is discovered that, in a constant return to scale, Thailand and Malaysia nearly reach full technical efficiency in developing human capital, and the rest are fully efficient. When measured in terms of variable return to scale, only Thailand is inefficient and is in the stage of decreasing return to scale. The comparison between 2018 and 2020 shows that human capital creation productivity in 2020 in Vietnam, Thailand, and Malaysia improved compared to 2018 as a result of technological improvement. However, they are still less than Indonesia, the Philippines, and the target optimal efficiency level. Therefore, the recommendations are that the governments of Thailand and Malaysia should make more effort to utilize their inputs to support human capital development.