Table 2.
Overview of country-level variables.
Source: Author’s own work
| Variable name | Type | Coding details | Source | Studies finding a significant effect of this or a closely related variable | |
|---|---|---|---|---|---|
| Economic constraints | Unemployment rate | Interval | The number of unemployed persons as a percentage of the active population | Eurostat (2021d) | Elek and Köllő (2019), Williams and Efendic (2021), Williams and Horodnic (2015a, b), Williams et al. (2015a, b) |
| Implicit tax rate on labour | Interval | The sum of all direct and indirect taxes and employees' and employers' social contributions levied on employed labour income divided by the total compensation of employees working in the economic territory increased by taxes on wage bill and payroll | Eurostat (2021a) | Ameyaw and Dzaka (2016), Clotfelter (1983), Dreher et al. (2009), Kayaoglu and Williams (2017), Rei and Bhattacharya (2008), Kassa (2021), Kuehn (2014), Pommerehne (1996), Yitzhaki (1987) | |
| Income inequality index | Interval | The ratio of total income received by the 20% of the population with the highest income to that received by the 20% of the population with the lowest income | Eurostat (2021b) | Bloomquist (2003), Christie and Holzner (2006), Engel et al. (2020), Kayaoglu and Williams (2017), Shafer et al. (2020) | |
| Relative median income ratio for persons 65 + | Interval | The ratio of the median equivalised disposable income of people aged above 65 to the median equivalised disposable income of those aged below 65 | Eurostat (2021c) | Franic and Cichocki (2021), Franic (2020b), Katnic and Williams (2018), Williams (2007) | |
| State intervention | Size of the government | Interval | Values indicating the extent to which countries rely on the political process to allocate resources and goods and services (values given on the scale between 0 and 10) | Fraser Institute (2021) | Arendt et al. (2020), Li and Ma (2015), Picur and Riahi-Belkaoui (2006), Rei and Bhattacharya (2008) |
| Labour market regulations | Interval | The extent to which various restraints (e.g., minimum wages, dismissal regulations, centralized wage setting, extension of union contracts to nonparticipating parties, and conscription) upon economic freedom are present (values given on the scale between 0 and 10) | Fraser Institute (2021) | Rei and Bhattacharya (2008), Bíró et al. (2020), Loayza et al. (2005), Vorley and Williams (2012), Williams (2015) | |
| Business regulations | Interval | The extent to which regulations and bureaucratic procedures restrain entry and reduce competition (values given on the scale between 0 and 10) | Fraser Institute (2021) | Goel and Saunoris (2017), Islam et al. (2020), Loayza et al. (2005), Popescu et al. (2018), Riahi-Belkaoui (2004), Vallanti and Gianfreda (2020) | |
| Quality of formal institutions | Government effectiveness | Interval | Perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies (values in the range between − 2.5 and 2.5) | World Bank (2021) | Dreher et al. (2009), Kayaoglu and Williams (2017), Islam et al. (2020), Kuehn (2014), Rashid et al. (2021), Yamen et al. (2018) |
| Rule of law | Interval | Perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence (values in the range between − 2.5 and 2.5) | World Bank (2021) | Christie and Holzner (2006), Islam et al. (2020), Kogler et al. (2013), Kayaoglu and Williams (2017), Rashid et al. (2021), Richardson (2006), Yamen et al. (2018) | |
| Regulatory quality | Interval | Perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development (values in the range between − 2.5 and 2.5) | World Bank (2021) | Loayza et al. (2005), Popescu et al. (2018), Rashid et al. (2021), Riahi-Belkaoui (2004), Richardson (2006), Yamen et al. (2018) | |
| Corruption perceptions index | Interval | Perceptions by business people and country experts of the level of corruption in the public sector (values given on the scale between 0 and 100) | Transparency International (2021) | Christie and Holzner (2006), Kayaoglu and Williams (2017), Khlif et al. (2016), Kogler et al. (2013), Picur and Riahi-Belkaoui (2006) | |
| Informal institutions | Trust in government | Interval | Percentage of people that tend to trust the national government | European Commission (2019) | Gërxhani and Wintrobe (2021), Forteza and Noboa (2019), Jimenez and Iyer (2016), Richardson (2006), Strielkowski and Čábelková (2015), van Dijke and Verboon (2010) |
| Trust in other people | Interval | The average level of trust in other people (values given on the scale between 0 and 10) | ESS (2021) | Alm et al. (2017), Bobek et al. (2013), Engel et al. (2020), Frey and Torgler (2007), Gërxhani and Wintrobe (2021) | |
| Religiosity | Interval | The share of the population attending religious services (apart from weddings, funerals, and christenings) at least once a week | EVS (2021) | Alm et al. (2016), Benk et al. (2016), Boone et al. (2013), Islam et al. (2020), Rashid et al. (2021), Richardson (2006), Strielkowski and Čábelková (2015) | |
| Average level of tax morale | Interval | Average values by country of the tax morale index | Values constructed from individual-level variable | Franic and Cichocki (2021), Kemme et al. (2020), Riahi-Belkaoui (2004), Richardson (2006) |
(i) All values refer to 2019, except for state intervention variables (2018), an indicator of trust in other people (2018), and figures on religiosity (2017)