Table 2

Country indicators of economic and institutional framework

CountryVoice and accountability (VA)Log of number of days necessary to enforce a contract (DAYS)Share of unofficial economy (UE)Employment protection (EP)Old age and disability benefits (ADB)Sickness and health benefits (SHB)
Armenia−0.3025.2730.4630.6020.4740.982
Belarus−1.2135.521
Georgia−0.2065.9270.6730.7710.5970.000
Kazakhstan−0.9085.9910.4320.7800.5850.000
Kyrgyz Republic−0.6766.1980.3980.7460.5740.970
Moldova−0.0085.635
Russian Federation−0.4365.7990.4610.8280.5861.000
Ukraine−0.3935.5950.5220.6610.5921.000
  • EP measures the protection of labour and employment laws as the average of: 1. alternative employment contracts, 2. cost of increasing hours worked, 3. cost of firing workers and 4. dismissal procedures.

  • ADB measures the level of old age, disability and death benefits as the average of the following four normalised variables: 1. the difference between retirement age and life expectancy at birth, 2. the number of months of contributions or employment required for normal retirement by law, 3. the percentage of the worker's monthly salary deducted by law to cover old-age, disability, and death benefits and 4. the percentage of the net pre-retirement salary covered by the net old age cash-benefit pension.

  • SHB measures the level of sickness and health benefit as the average of the following four normalised variables: 1. the number of months of contributions or employment required to qualify for sickness benefits by law, 2. the percentage of the worker's monthly salary deducted by law to cover sickness and health benefits, 3. the waiting period for sickness benefits and 4.the percentage of the net salary covered by the net sickness cash benefit for a 2-month sickness spell.

  • Source: Voice and Accountability (VA) is an index ranging between −2.5 and 2.5 developed by Kauffman et al (2002) and included among the World Bank Governance Indicators. Higher values correspond to better governance. All other indicators have been produced by Prof. Andrei Shleifer and are available at http://www.economics.harvard.edu/faculty/shleifer/dataset. DAYS is the logarithm of days necessary to enforce a contract. UE is the size of the shadow economy as share of GDP. EP, ADB and SHB are indices ranging between 0 and 1, higher values mean greater social protection. They result from averaging out several subindicators also available on Shleifer's page where readers are referred for a complete description.