Women, Business and the Law

Following extensive consultation with gender experts, academics, civil society organizations and colleagues in the World Bank Group, the Women, Business and the Law team designs questionnaires that are shared with  a large sample of lawyers, judges, academics and members of civil society organizations in 190 economies. These local experts—who complete the surveys on a pro bono basis—are identified by their expertise in the various areas of laws covered by the report.

The team further engages with the local experts through conference calls, written correspondence and in-person meetings on country visits. The team then analyzes all questionnaire responses, verifying each answer against the corresponding primary legal source. Lastly, the data undergoes a thorough internal review process across the World Bank Group.

For Women, Business and the Law 2020’s examination of the data, 35 questions are scored across the eight indicators in the index. These questions are based on data collected over the project’s ten years of existence. While many questions are consistent with previous cycles of Women, Business and the Law, some questions have been combined or reformulated and the data have been recalculated to build a 50-year panel of questions.

Data for Somalia, Venezuela RB and Yemen have been included in the 2020 report.

Information on the construction of the panel, the methodology and the scoring for each question can be found in the Data Notes, available on the Women, Business and the Law website at: wbl.worldbank.org.

The Women, Business and the Law index is based on statistically significant associations with outcomes related to women’s economic empowerment, in particular with women’s labor force participation as well as with other outcomes of interest. The first seven indicators demonstrate statistically significant associations with one or more of the following outcomes even after controlling for the log of GNI per capita and region-fixed effects: the female to male labor force participation rate ratio from the World Bank’s World Development Indicators database, the female to male wage ratio from the World Economic Forum’s Global Gender Gap Report, the percentage of firms with a female top manager from the World Bank’s Enterprise Surveys and the percentage of females (age 15+) who report owning financial accounts from the World Bank’s Global FINDEX database. For the final indicator, Pension, a statistically significant association was found with the percentage of females (age 15+) who report saving or setting aside any money for old age in the past year from the World Bank’s Global FINDEX database.

In addition to the association of indicators with outcomes, Women, Business and the Law employs a thorough review of the economic literature to support each indicator. This review demonstrates how legislation influences women’s equality of opportunity during different phases of their working lives and affects economic outcomes.

Finally, to ensure their relevance to women’s human and economic rights, each indicator is supported by the international legal framework set out in the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW). Questions on sexual harassment under the Workplace indicator, divorce and domestic violence questions under the Marriage indicator and childcare credits under the Pension indicator are also supplemented by the UN Declaration on the Elimination of Violence against Women (DEVAW) and by the Committee on the Elimination of Discrimination against Women General Recommendations (CEDAW GR). Questions on maternity leave for the Parenthood indicator use the International Labor Organization (ILO) Maternity Protection Convention N. 183 of 2000 as a benchmark.

Women, Business and the Law 2020 provides scores for each economy covered. Thirty-five data points are scored across eight indicators of four or five binary questions, with each indicator representing a different phase of a woman’s career. Indicator-level scores are obtained by calculating the unweighted average of the questions within that indicator and scaling the result to 100. Overall scores are then calculated by taking the average of each indicator, with 100 representing the highest possible score.

Policymakers, international organizations, civil society organizations, gender equality advocates, investors and researchers can use Women, Business and the Law findings in many ways. For example, the data can be used to identify good practices and compare countries on how conducive their regulatory environment is for women business owners and workers. Women, Business and the Law findings can also be used to assess the economic impact of laws and regulations on women’s prospects as employees and entrepreneurs, bolstering traditional human rights arguments with economic research. The findings can be used to influence legislative change, make informed decisions regarding policy reform and private investment and support research on institutions and regulation.

While recognizing that there is often a gap between the laws on the books and actual practice, Women, Business and the Law does not cover implementation or practice. One of the main features of the Women, Business and the Law methodology is that it focuses on the law. By doing so, it provides an objective, quantitative measure of how specific regulations affect women’s incentives to participate in economic activity. Implementation and practice are critical in shaping women’s economic opportunities, but they are not included in the study because they are difficult to measure in a comparable, cost-effective way across economies.

Women, Business and the Law focuses on the formal legal and regulatory environment, determining whether women can open their own businesses or work. Although most women in developing economies start businesses or work in the informal economy, a goal of this project is to define some of the features of the legal framework that make it more difficult for women to transition from the informal to the formal economy. To maintain comparability across economies, Women, Business and the Law includes an assumption that the woman in question is employed in the formal sector. However, many of these indicators have direct relevance for women who work in the informal sector, for example laws affecting women’s ability to own or inherit property, or protections against domestic violence. Indirectly, legal protections affecting the formal sector provide a foundation for economic inclusion and offer incentives for women to be employed or start businesses in the formal sector.

Women, Business and the Law data is based on codified laws only and in some cases, in common law countries, legal precedent. Religious or customary practices that are not codified are not reflected in the data. Unwritten, social or cultural norms—which may have a large impact on women’s lives—are also not considered. This limitation also ensures that the indicators remain actionable, because the law is what policymakers can change.