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Table 9 Global Competitiveness Report labour market pillar and changes over time (2008–2013)

From: Composite indicators of labour market regulations in a comparative perspective

Report year

2009–2010

2010–2011, 2011–2012

2012–2013

Number of countries

133

139, 142

144

LM efficiency

7th pillar

1. Flexibility—50 %

• (7.01) Cooperation in labour-employer relations

• (7.02) Flexibility of Wage Determination

• (7.03) Rigidity of Employment

• (7.04) Hiring and Firing practices

• (6.04) Extent and effect of taxation (weight = ½)

• (6.05) Total tax rate (weight = ½)

• (7.05) Firing Costs

2. Efficient use of talent—50 %

• (7.06) Pay and Productivity

• (7.07) Reliance on Professional Management (weight = ½)

• (7.08) Brain Drain

• (7.09) Female participation in labour force

7th pillar

1. Flexibility—50 %

• (7.01) Cooperation in labour-employer relations

• (7.02) Flexibility of Wage Determination

• (7.03) Rigidity of Employment

• (7.04) Hiring and Firing practices

• (7.05) Redundancy Cost

• (6.04) Extent and effect of taxation (weight = ½)

2. Efficient use of talent—50 %

• (7.06) Pay and Productivity

• (7.07) Reliance on Professional Management (weight = ½)

• (7.08) Brain Drain

• (7.09) Female participation in labour force

7th pillar

1. Flexibility—50 %

• (7.01) Cooperation in labour-employer relations

• (7.02) Flexibility of Wage Determination

• (7.03) Hiring and Firing practices

• (7.04) Redundancy Cost

• (6.04) Extent and effect of taxation (weight = ½)

2. Efficient use of talent—50 %

• (7.05) Pay and Productivity

• (7.06) Reliance on Professional Management (weight = ½)

• (7.07) Brain Drain

• (7.08) Female participation in labour force

  1. Variables definitions (2001–2002 to 2003–2004 reports)
  2. Brain Drain: survey question: “Scientists and Engineers in your country… 1=normally leave to pursue opportunities elsewhere, 7=almost always remain in the country”
  3. Minimum wages: survey question: “The minimum wage set by law in your country is…1=never enforced, 7=strongly enforced”
  4. Reliance on Professional Management: survey question: “Senior management positions in your country… 1=are often held by relatives, 7=go only to skilled professionals”
  5. Hiring and Firing practices: survey question: “Hiring and firing workers is… 1=impeded by regulations, 7=flexibly determined by employers”
  6. Pay and Productivity: survey Question: “Pay in your country is… 1=not related to worker productivity, 7=strongly related to worker productivity”
  7. Definitions and sources of additional variables, from 2004–2005 report onwards
  8. Flexibility of Wage Determination: survey question: “Wages in your country are… 1 = set by a centralized bargaining process, 7 = up to each individual company”
  9. Cooperation in labour-employer relations: survey question: “Labour-employer relations in your country are… 1=generally confrontational, 7=generally cooperative”
  10. Extent and effect of taxation: survey question: “The level of taxes in your country… 1=significantly limits incentive to work or invest, 7=has little impact on incentives to work or invest
  11. Maternity laws’ impact on hiring women: survey question: “In your country, maternity laws… 1=impede the hiring of women, 7=are not a hindrance for hiring women”
  12. Private sector employment of women: survey question: “In your country, private sector employment of women is … 1=limited and usually takes place in less important jobs, 7=is equal to that of men”
  13. Nonwage labour costs: estimate of social security payment (retirement fund, sickness, maternity and health insurance, workplace injury, family allowance, and other obligatory contributions) and payroll taxes associated with hiring an employee in a fiscal year, expressed as a percentage of the worker’s salary in that fiscal year. Source: The World Bank, Doing Business
  14. Rigidity of Employment: Rigidity of Employment index on a 0 (best)-to-100 scale. Source: The World Bank, Doing Business
  15. Total tax rate: This variable is a combination of profit tax (per cent of profits), labour tax and contributions (per cent of profits), and other taxes (per cent of profits). Source: The World Bank, Doing Business
  16. Female participation in labour force: percentage of women aged 14–65 participating in the labour force divided by the percentage of men aged 14–65 participating in the labour force. The indicator uses a 15–64 age group from GCR’s 2010–2011 report onwards. Sources: International Labour Organization, Key Indicators of the Labour Markets Net (4th edition, 2005); national sources
  17. Redundancy Cost: estimate of the cost of advance notice requirements, severance payments, and penalties due when terminating a redundant worker, expressed in weekly wages. Sources: The World Bank, Doing Business. The indicator was referred to as Firing Costs till WEF’s 2009–2010 report. Note changing worker profile: reference for 20 years of service is reported prior to the 2012–13 report; 1, 5, and 10 years of service are reported in the 2012–2013 report
  18. Hard data are reported as they are. However, in calculating the LME index, it is converted into the 1–7 scale using the following formula
  19. 6 × (country value − sample minimum)/ (sample maximum − sample minimum) + 1
  20. The sample minimum and sample maximum are the lowest and highest values of the overall sample, respectively. In some cases, adjustments were made to account for extreme outliers in the data