Description
This indicator measures a country government’s commitment to ending child labor, preventing employment discrimination, and protecting the rights of workers and people with disabilities.
Relationship to Economic Growth
This indicator measures governments policies that drive economic growth and poverty reduction by supporting policies in four areas that ensure everyone has an opportunity to earn a living: disability rights, forced labor, employment discrimination, and the prevention of child labor.84 Broadly, failing to give individuals the opportunity to work increases poverty through denied employment and exclusion, while ensuring employment opportunities can drive economic growth.85 Ensuring that people with disabilities have employment opportunities and the ability to contribute to the economy supports economic growth.86 This is particularly critical in developing countries, as people with disabilities make up a disproportionate share of the global poor and supporting the rights of these groups is a crucial component of poverty reduction.87 Forced labor impedes the ability of individuals to earn a fair wage and exacerbates poverty such as by keeping individuals in debt bondage, preventing them from being able to earn anything or ever become free.88 Child labor is associated with lower productivity due to lower human capital accumulation, higher poverty and a larger informal sector (which is linked to lower economic growth).89
Methodology
Indicator Institution Methodology
This indicator is sourced from three places: the World Bank’s Business Ready (B-Ready) data on Labor, the World Bank’s databank Child Labor, and the World Bank’s Women Business and the Law (WBL) data on disabilities rights, particularly women with disabilities. The B-Ready data on Labor conducts a combination of legal reviews and expert surveys to construct this indicator. Specifically, MCC uses indicator 1.1.1 in the Labor topic. This includes 12 sub-components measuring issues of prohibition of forced labor, prohibitions on child labor, protections against workplace discrimination, workplace safety and more. For the Child Labor portion, the data are measured using household surveys. Specifically, they assess whether children are engaged in child labor above age specific hourly thresholds in the last week. For children ages 5-11, this is one hour or more engaged in economic activities or unpaid household services for 21 hours or more. For children ages 12-14, this means working 14 or more hours on economic activities or doing unpaid household services for 21 hours or more. For children ages 15-17, this means working for 43 hours or more in economic activities in a week. MCC uses the most recent datapoint from the last 6 years (since 2019).90 Economic activities include all types of businesses engaged in the production or distribution of goods or services. Household chores refer to services provided to household members without pay. For the Disability Rights data, the institution conducted a review of the laws and constitutions of countries to determine whether certain rights are protected. This dataset focuses on the rights of people with disabilities, with a specific focus on women with disabilities. The dataset looks at 11 questions on these rights. Responses of “Yes” are given 1 point, and responses of “No” or “N/A” are given zero points as WBL does with its main index. These 11 scores are then averaged together to form the Disability Rights portion of this indicator.
MCC Methodology
MCC’s Employment Opportunity Score = [ (1/3) x (Normalized Disability Rights) ] + [ (1/3) x (Normalized B-Ready) ] + [ (1/3) x (Normalized Child Labor) ]
The Employment Opportunity indicator is calculated as an average of three sub-indicators: Disability Rights, B-Ready, and Child Labor. First, the different questions for Disability Rights are aggregated together as described above. Second, all four sub-sources are normalized using percentile rank for their income group to a scale between 0 and 1, then the four components are averaged together. If any components are missing for a particular country the score is the average of the components that are not missing. If all components are missing the indicator is considered missing and a country will receive an N/A on the indicator. Score years are labeled based on the year of the B-Ready data used. For FY26 the scores are labeled as 2024.
First, the disability rights sub-indicator is aggregated by averaging the scores on each of the questions (i.e. the percentage of questions where rights are guaranteed in the law). So, if a country has protections for 5 of the 11 listed under disability rights, they will receive a score of approximately 0.4545 on this component. (5 ÷ 11 ≈ 0.4545; 5 is 45.45% of 11).
- Average Disability Rights = (Number of questions where the answer is “yes”)/11
Then, all three components are normalized using percentile ranks as described by the equation below
- Normalized Sub-Component = (Number of countries scoring below Country X on Sub-Component data in the income group) ÷ (Number of Countries scoring equal to or greater than Country X on Sub-Component data in the income group + Number of countries scoring below Country X on Sub-Component data in the income group)
For example, to calculate a given country X’s score, MCC first finds the number of countries that score worse than that country in the income pool, and the number of countries that have the same or better score than country X on the sub-source. MCC then divides the number of countries below by the sum of the number of countries below and the number of countries equal or above. Missing values are not included in these calculations. Finally, MCC averages the normalized values for each source together. If any sub-component is missing, the average normalized score for the other is used, but if all are missing the indicator is considered missing and assigned an “N/A”.