Business Environment and Labor Market Outcomes in Europe and Central Asia Countries

New firm entry has been fundamental for job creation in the transition economies. Hence, the urge to reform the framework in which firms operate. This paper aims to improve our understanding of the business environment of the Europe and Central Asia (ECA) countries, as well as to assess which of the...

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Main Author:	Lopez-Garcia, Paloma
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AGGREGATE DEMAND AGGREGATE EMPLOYMENT AGGREGATE SUPPLY AGRICULTURE BANK LOANS BANKRUPTCY BUSINESS ENVIRONMENT COLLECTIVE BARGAINING COMPANY COMPETITIVENESS CONTRACT ENFORCEMENT CORPORATIONS CORRELATION ANALYSIS CYCLICAL UNEMPLOYMENT DISPLACED WORKERS DISPLACEMENT ECONOMIC PERFORMANCE ECONOMIC SECTORS EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT LEVEL EMPLOYMENT OUTCOMES EMPLOYMENT PERFORMANCE EMPLOYMENT PROTECTION LEGISLATION EMPLOYMENT RATE EMPLOYMENT RATES ENTREPRENEURIAL ACTIVITY ENTREPRENEURS ENTREPRENEURSHIP ENTRY BARRIERS EXISTING BUSINESSES EXPANSION FINANCIAL MARKET FINANCIAL SECTOR FIRM ENTRY FIRM SIZE FIRMS GDP GDP PER CAPITA HIGH UNEMPLOYMENT INFLATION INFORMAL ECONOMY INFORMAL SECTOR JOB CREATION JOB DESTRUCTION JOBS LABOR MARKET LABOR MARKET INDICATOR LABOR MARKET INDICATORS LABOR MARKET INSTITUTIONS LABOR MARKET OUTCOMES LABOR MARKET PERFORMANCE LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKETS LABOR REGULATION LABOUR LABOUR FORCE LABOUR MARKET LABOUR MARKET PERFORMANCE LARGE ENTERPRISES LAW FIRMS LOW UNEMPLOYMENT MACROECONOMIC POLICIES MARKET ECONOMIES MARKET ECONOMY MINIMUM WAGES NATURAL RATE OF UNEMPLOYMENT PRELIMINARY ANALYSIS PREVIOUS SECTION PRICE CONTROLS PRIVATE PRIVATE EMPLOYMENT PRIVATE SECTOR PROPERTY RIGHTS PUBLIC EMPLOYMENT PUBLIC SECTOR EMPLOYMENT REAL INTEREST RATE REGRESSION ANALYSIS RETAIL RETAIL TRADE SERVICE EMPLOYMENT SERVICE SECTOR SMALL BUSINESSES SMALL FIRMS SPREAD TOTAL EMPLOYMENT TRANSITION ECONOMIES UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT RATE VENTURE CAPITAL WORKER WORKERS
Online Access:	http://documents.worldbank.org/curated/en/2006/04/6727780/business-environment-labor-market-outcomes-europe-central-asia-countries http://hdl.handle.net/10986/8722

id	okr-10986-8722
recordtype	oai_dc
spelling	okr-10986-87222021-04-23T14:02:40Z Business Environment and Labor Market Outcomes in Europe and Central Asia Countries Lopez-Garcia, Paloma AGGREGATE DEMAND AGGREGATE EMPLOYMENT AGGREGATE SUPPLY AGRICULTURE BANK LOANS BANKRUPTCY BUSINESS ENVIRONMENT COLLECTIVE BARGAINING COMPANY COMPETITIVENESS CONTRACT ENFORCEMENT CORPORATIONS CORRELATION ANALYSIS CYCLICAL UNEMPLOYMENT DISPLACED WORKERS DISPLACEMENT ECONOMIC PERFORMANCE ECONOMIC SECTORS EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT LEVEL EMPLOYMENT OUTCOMES EMPLOYMENT PERFORMANCE EMPLOYMENT PROTECTION LEGISLATION EMPLOYMENT RATE EMPLOYMENT RATES ENTREPRENEURIAL ACTIVITY ENTREPRENEURS ENTREPRENEURSHIP ENTRY BARRIERS EXISTING BUSINESSES EXPANSION FINANCIAL MARKET FINANCIAL SECTOR FIRM ENTRY FIRM SIZE FIRMS GDP GDP PER CAPITA HIGH UNEMPLOYMENT INFLATION INFORMAL ECONOMY INFORMAL SECTOR JOB CREATION JOB DESTRUCTION JOBS LABOR MARKET LABOR MARKET INDICATOR LABOR MARKET INDICATORS LABOR MARKET INSTITUTIONS LABOR MARKET OUTCOMES LABOR MARKET PERFORMANCE LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKETS LABOR REGULATION LABOUR LABOUR FORCE LABOUR MARKET LABOUR MARKET PERFORMANCE LARGE ENTERPRISES LAW FIRMS LOW UNEMPLOYMENT MACROECONOMIC POLICIES MARKET ECONOMIES MARKET ECONOMY MINIMUM WAGES NATURAL RATE OF UNEMPLOYMENT PRELIMINARY ANALYSIS PREVIOUS SECTION PRICE CONTROLS PRIVATE PRIVATE EMPLOYMENT PRIVATE SECTOR PROPERTY RIGHTS PUBLIC EMPLOYMENT PUBLIC SECTOR EMPLOYMENT REAL INTEREST RATE REGRESSION ANALYSIS RETAIL RETAIL TRADE SERVICE EMPLOYMENT SERVICE SECTOR SMALL BUSINESSES SMALL FIRMS SPREAD TOTAL EMPLOYMENT TRANSITION ECONOMIES UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT RATE VENTURE CAPITAL WORKER WORKERS New firm entry has been fundamental for job creation in the transition economies. Hence, the urge to reform the framework in which firms operate. This paper aims to improve our understanding of the business environment of the Europe and Central Asia (ECA) countries, as well as to assess which of the institutions that shape it are most important for labor market performance. To achieve that aim, the author groups the institutions into those affecting firm entry and those affecting business survival and growth, and proceeds to construct indicators to summarize them. Next, she analyzes the impact of the business environment institutions on the employment generated by the private sector of the countries, proxied by the service employment rate. The regression analysis uses an unbalanced panel of 28 ECA countries over 14 years-from 1988 to 2002. Recent literature on the labor market performance of the OECD countries argues that what matters for employment is the interaction between institutions and shocks. Accordingly, the explanatory variables used in the regression are the interactions between the transition shock suffered by the ECA countries and each of the business environment institutions previously defined. The author finds that access to finance is the most important institution across all ECA countries. The development of the financial sector can explain about 40 percent of private employment creation in the European transition economies according to the model. On the other hand, the poor access to finance in Bulgaria, Croatia, and above all, Romania, is the main factor behind their poor development of the private sector. Market regulation (credit and labor regulation), start-up costs, and the tax burden are all found to significantly affect employment as well. 2012-06-21T20:48:34Z 2012-06-21T20:48:34Z 2006-04 http://documents.worldbank.org/curated/en/2006/04/6727780/business-environment-labor-market-outcomes-europe-central-asia-countries http://hdl.handle.net/10986/8722 English Policy Research Working Paper; No. 3885 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AGGREGATE DEMAND AGGREGATE EMPLOYMENT AGGREGATE SUPPLY AGRICULTURE BANK LOANS BANKRUPTCY BUSINESS ENVIRONMENT COLLECTIVE BARGAINING COMPANY COMPETITIVENESS CONTRACT ENFORCEMENT CORPORATIONS CORRELATION ANALYSIS CYCLICAL UNEMPLOYMENT DISPLACED WORKERS DISPLACEMENT ECONOMIC PERFORMANCE ECONOMIC SECTORS EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT LEVEL EMPLOYMENT OUTCOMES EMPLOYMENT PERFORMANCE EMPLOYMENT PROTECTION LEGISLATION EMPLOYMENT RATE EMPLOYMENT RATES ENTREPRENEURIAL ACTIVITY ENTREPRENEURS ENTREPRENEURSHIP ENTRY BARRIERS EXISTING BUSINESSES EXPANSION FINANCIAL MARKET FINANCIAL SECTOR FIRM ENTRY FIRM SIZE FIRMS GDP GDP PER CAPITA HIGH UNEMPLOYMENT INFLATION INFORMAL ECONOMY INFORMAL SECTOR JOB CREATION JOB DESTRUCTION JOBS LABOR MARKET LABOR MARKET INDICATOR LABOR MARKET INDICATORS LABOR MARKET INSTITUTIONS LABOR MARKET OUTCOMES LABOR MARKET PERFORMANCE LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKETS LABOR REGULATION LABOUR LABOUR FORCE LABOUR MARKET LABOUR MARKET PERFORMANCE LARGE ENTERPRISES LAW FIRMS LOW UNEMPLOYMENT MACROECONOMIC POLICIES MARKET ECONOMIES MARKET ECONOMY MINIMUM WAGES NATURAL RATE OF UNEMPLOYMENT PRELIMINARY ANALYSIS PREVIOUS SECTION PRICE CONTROLS PRIVATE PRIVATE EMPLOYMENT PRIVATE SECTOR PROPERTY RIGHTS PUBLIC EMPLOYMENT PUBLIC SECTOR EMPLOYMENT REAL INTEREST RATE REGRESSION ANALYSIS RETAIL RETAIL TRADE SERVICE EMPLOYMENT SERVICE SECTOR SMALL BUSINESSES SMALL FIRMS SPREAD TOTAL EMPLOYMENT TRANSITION ECONOMIES UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT RATE VENTURE CAPITAL WORKER WORKERS
spellingShingle	AGGREGATE DEMAND AGGREGATE EMPLOYMENT AGGREGATE SUPPLY AGRICULTURE BANK LOANS BANKRUPTCY BUSINESS ENVIRONMENT COLLECTIVE BARGAINING COMPANY COMPETITIVENESS CONTRACT ENFORCEMENT CORPORATIONS CORRELATION ANALYSIS CYCLICAL UNEMPLOYMENT DISPLACED WORKERS DISPLACEMENT ECONOMIC PERFORMANCE ECONOMIC SECTORS EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT LEVEL EMPLOYMENT OUTCOMES EMPLOYMENT PERFORMANCE EMPLOYMENT PROTECTION LEGISLATION EMPLOYMENT RATE EMPLOYMENT RATES ENTREPRENEURIAL ACTIVITY ENTREPRENEURS ENTREPRENEURSHIP ENTRY BARRIERS EXISTING BUSINESSES EXPANSION FINANCIAL MARKET FINANCIAL SECTOR FIRM ENTRY FIRM SIZE FIRMS GDP GDP PER CAPITA HIGH UNEMPLOYMENT INFLATION INFORMAL ECONOMY INFORMAL SECTOR JOB CREATION JOB DESTRUCTION JOBS LABOR MARKET LABOR MARKET INDICATOR LABOR MARKET INDICATORS LABOR MARKET INSTITUTIONS LABOR MARKET OUTCOMES LABOR MARKET PERFORMANCE LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKETS LABOR REGULATION LABOUR LABOUR FORCE LABOUR MARKET LABOUR MARKET PERFORMANCE LARGE ENTERPRISES LAW FIRMS LOW UNEMPLOYMENT MACROECONOMIC POLICIES MARKET ECONOMIES MARKET ECONOMY MINIMUM WAGES NATURAL RATE OF UNEMPLOYMENT PRELIMINARY ANALYSIS PREVIOUS SECTION PRICE CONTROLS PRIVATE PRIVATE EMPLOYMENT PRIVATE SECTOR PROPERTY RIGHTS PUBLIC EMPLOYMENT PUBLIC SECTOR EMPLOYMENT REAL INTEREST RATE REGRESSION ANALYSIS RETAIL RETAIL TRADE SERVICE EMPLOYMENT SERVICE SECTOR SMALL BUSINESSES SMALL FIRMS SPREAD TOTAL EMPLOYMENT TRANSITION ECONOMIES UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT RATE VENTURE CAPITAL WORKER WORKERS Lopez-Garcia, Paloma Business Environment and Labor Market Outcomes in Europe and Central Asia Countries
geographic_facet	Europe and Central Asia
relation	Policy Research Working Paper; No. 3885
description	New firm entry has been fundamental for job creation in the transition economies. Hence, the urge to reform the framework in which firms operate. This paper aims to improve our understanding of the business environment of the Europe and Central Asia (ECA) countries, as well as to assess which of the institutions that shape it are most important for labor market performance. To achieve that aim, the author groups the institutions into those affecting firm entry and those affecting business survival and growth, and proceeds to construct indicators to summarize them. Next, she analyzes the impact of the business environment institutions on the employment generated by the private sector of the countries, proxied by the service employment rate. The regression analysis uses an unbalanced panel of 28 ECA countries over 14 years-from 1988 to 2002. Recent literature on the labor market performance of the OECD countries argues that what matters for employment is the interaction between institutions and shocks. Accordingly, the explanatory variables used in the regression are the interactions between the transition shock suffered by the ECA countries and each of the business environment institutions previously defined. The author finds that access to finance is the most important institution across all ECA countries. The development of the financial sector can explain about 40 percent of private employment creation in the European transition economies according to the model. On the other hand, the poor access to finance in Bulgaria, Croatia, and above all, Romania, is the main factor behind their poor development of the private sector. Market regulation (credit and labor regulation), start-up costs, and the tax burden are all found to significantly affect employment as well.
format	Publications & Research :: Policy Research Working Paper
author	Lopez-Garcia, Paloma
author_facet	Lopez-Garcia, Paloma
author_sort	Lopez-Garcia, Paloma
title	Business Environment and Labor Market Outcomes in Europe and Central Asia Countries
title_short	Business Environment and Labor Market Outcomes in Europe and Central Asia Countries
title_full	Business Environment and Labor Market Outcomes in Europe and Central Asia Countries
title_fullStr	Business Environment and Labor Market Outcomes in Europe and Central Asia Countries
title_full_unstemmed	Business Environment and Labor Market Outcomes in Europe and Central Asia Countries
title_sort	business environment and labor market outcomes in europe and central asia countries
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/04/6727780/business-environment-labor-market-outcomes-europe-central-asia-countries http://hdl.handle.net/10986/8722
_version_	1764405864174714880

Business Environment and Labor Market Outcomes in Europe and Central Asia Countries

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