Extreme disparity in European labour markets: an Employment Flexibility Index
12 December 2017
The recent Employment Flexibility Index uses data provided by the World Bank’s Doing Business Labour Market Regulation Questionnaire to compare labour market regulations.
The data covers a set of labour regulation indicators from 2018 on hiring, working hours as well as redundancy rules and costs to rank OECD and EU countries.
Labour market regulation tends to vary greatly between countries due to social, cultural and political differences. Rigidity is often associated with negative economic outcomes, including lower labour market participation and higher unemployment, a two-tier labour market, lower productivity as well as reduced job creation and labour mobility.
Despite this, all countries tend to follow the general principles of flexibility in hiring, employment contracts, minimum wages, working hours and dismissal procedures.