Doing Business: An
Overview of the Employing
Workers Indicator
Sylvia Solf
Doing Business 2007 to 2010
2007
2008
2009
2010
175 economies
178 economies
181 economies
182 economies
 Starting a
 Update of 2007
business
 Dealing with
construction
permits
 Employing
workers
 Registering
property
 Getting credit
 Protecting
investors
 Paying taxes
 Trading across
borders
 Enforcing
contracts
 Closing a business
 New “About DB”
chapter
 Add 3 countries
 Reformer’s Club,
and 16 case
studies
 Trends analysis
DB04-DB09
Most popular
reforms
Most effective
reforms
Lessons learned
 Add 3 new countries
(Bahamas, Bahrain,
Qatar)
 Methodology change
in Getting Credit
(Legal Rights)
 Business
regulation and
reform in the
context of the
global crisis
 EWI and social
protection
 ILO core labor
standards- child
labor
 Piloting a new
infrastructure
indicator
 New insights on
gender
 Add Cyprus
2
What does the Employing Workers
Indicator (EWI) measure?
•
•
•
EWI: One of legal scoring indicators
1.
Based on a standardized
case
2.
Establishes indices with
scoring scale
3.
Gather all the relevant laws,
regulations
4.
Assigns value based on
laws, regulation
5.
Main index is often a
function of underlying
indices
Findings: Greater Rigidity in Poor
Countries
=
+
+
From Indicators to Realities




Difficulty of Hiring in Poor Countries
50
Rigidity and Informality: Who benefits?
ZMB
BOL
40
ZWE
JAM
UGA
NGA
30
GEO
TTO
PRY
MDG
PER
MLI IDN
HND
RUS
MOZ
AGO
CMR
MEX
MWI
DZA NPL
BFA
KAZ
NIC
TURUKR
BIH ECU
TZA
DOM
ETH
MNG
BGD BDI
ARGKHM
BRA
KEN
SUR
AZE
MAR
LSO
SLV BGR
ARMPHL
MRT
GMBLKA
EGY
ITA
MKD
COL
PAK
HRV
NAM
TMP
KOR ZAF SRB TJK
PAN
CHN HUN
GRC
VNM
IND
URY
CRI
POL
20
JOR
CAN
USA
KWT
CZE
GBR
DNK
ISR
MYS
IRL
JPN
AUS
ARE CHL
HKG
NZL
CHE
ISL
SGP
10
TCD
VEN
GTM
GUY
MUS
THA
BEL
BWA
0
KGZ
BEN
20
LVA
ALB
SWE
SVK
TWN
TUN
PRT
MDA DEU
LTU
AUT
NLD
NOR
ESP
ROM
EST SVN
FRA
LUX
FIN
40
Rigidity of Employment Index
60
80
Sources: Doing Business database, World Bank Development Indicators, Global Competitiveness Report..
Analysis holds controlling for income per capita.
Surveys of firms in 14 Latin American economies
50
40
30
20
1
2
3
4
Rigidity of Employment Ind
60
5
70
Potential Employment Increases from Labor Reform
0
net empl change %
How businesses view labor reform that result in
more flexibility and potential impact on job creation
Chi Slv Nic Col Gua Uru Arg Bol Per Mex Ecu Hon Par Pan
country
net empl change %
Source: Enterprise Surveys, Doing Business
Rigidity of Employment Ind
Indicators and benchmarking: Some views
Supporters
Criticisms
•Growing research contributes to insights
on relationship between labor regulation
(and reform) and social outcomes (e.g.
formal employment opportunities in
developing countries, for young, female)
Besley and Burgess (2004), Heckman
and Pages (2004), Botero et al. (2004)
•Assumptions are too narrow and do not
take into account country specific
characteristics
•Policy-makers interpret and use data
effectively (no evidence for policydistortion in context of DB)
•Countries reform only to improve
rankings (and this is easy)
•Employment regulation matters for
business decisions and job creation (firm
survey data)
•Doing Business “promotes” zero
regulation
•Benchmarking and indicators highly
effective in stimulating reform dialogue
(over 175 reforms informed by DB)
•DB indicators do not provide
comprehensive analysis of investment
climate/”doing business”(too partial, only
measure law)
•Social objectives of labor regulation are
not measured.
Business regulation reform on the rise globally
More than 1,000 business
regulation reforms tracked by
Doing Business since 2004
115 economies implemented
start-up reforms
154 of 181 economies
reformed in at least one of 10
areas covered in Doing
Business
99
112
98
113
58
Over 175 reforms in 69
economies informed by Doing
Business
Note: Reforms informed by Doing Business refers to reforms that were either supported by technical assistance
or where governments indicated that the reform dialogue and process wer e informed by DB.
11
Labor Reforms are Challenging
Number of reforms in 2007/8
Starting a business
49
Paying taxes
36
Trading across borders
34
Getting credit
27
Registering property
24
Dealing with constr. permits
18
Closing a business
16
Enforcing contracts
12
Protecting investors
12
Employing Workers
6
12
Most reforms in Europe and high income
countries
Thank you!
For more information visit: www.doingbusiness.org
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