**<u>Table A2. Descriptive statistics on explanatory variables</u>**

||**Easte**|**rn & Sou**|**thern Eu**|**rope **|**West**|**ern & N**|**orthern E**|**urope **|**E**|**urope (2 **|**7 countri**|**es)**|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
||mean|s.d.|min|max|mean|s.d.|min|max|mean|s.d.|min|max|
|_EPL_2 _|2.38|0.47|1.74|3.36|2.06|0.52|1.10|2.89|2.27|0.51|1.10|3.36|
|_GOV_EFFECT_<sup>a</sup>|0.66|0.59|-0.69|1.86|1.81|0.21|1.43|2.24|1.19|0.73|-0.69|2.24|
|_RULE_LAW_<sup>a</sup>|0.55|0.65|-0.93|1.30|1.70|0.20|1.22|1.96|1.08|0.75|-0.93|1.96|
|_SAT_GOV_|3.53|1.02|1.53|5.11|4.82|0.89|2.78|6.28|4.08|1.13|1.53|6.28|
|_GOVEXPsq_|17.14|4.81|7.13|26.93|22.75|6.21|11.37|32.60|21.50|1.90|7.13|32.60|
|___<br>_INVEST_FREE_|62.29|16.82|30.00|90.00|77.65|13.50|50.00|90.00|69.85|17.28|30.00|90.00|
|_TRADE_FREE_|79.29|9.08|44.20|86.60|83.14|2.62|79.80|87.20|81.24|6.95|44.20|86.60|
|_BUS_FREE_|69.93|10.82|40.50|85.30|86.33|9.45|70.00|100.00|78.13|13.12|40.50|100.00|
|_MON_FREE_<sup>a</sup>|77.66|5.42|62.80|85.70|85.16|2.61|80.50|90.00|81.25|5.48|62.80|89.90|
|_TAX_WEDGE_<sup>a</sup>|38.49|3.90|31.00|46.70|38.10|9.17|16.10|50.00|38.86|6.62|16.10|50.00|
|_MIN_WAGE0_|36.42|7.76|9.41|48.70|42.37|4.16|36.50|47.30|38.29|7.40|9.41|48.70|
|_MIN_WAGE_|36.42|7.76|9.41|48.70|42.37|2.61|36.50|47.30|38.29|6.31|9.41|48.70|
|_NO_MINWAGE_|0.00|0.00|0.00|0.00|0.59|0.50|0.00|1.00|0.27|0.45|0.00|1.00|
|_UNION_|19.46|10.33|10.20|44.99|43.52|25.06|10.92|84.01|31.72|22.72|7.76|84.01|
|_GDP_PC_<sup>a</sup>|8.68|0.78|6.83|9.70|10.26|0.17|10.04|10.64|9.42|0.97|6.83|10.64|
|_GROWTH_<sup>b</sup>|3.09|5.99|-17.8|10.80|2.13|2.43|-7.40|7.70|2.26|5.07|-17.8|10.80|
|_IMMIGR_|9.19|7.66|1.48|31.90|11.54|5.53|2.23|28.00|9.61|6.12|1.48|31.90|
|_MINORITY_|10.74|8.18|1.85|37.99|2.81|2.05|0.42|7.74|7.02|7.18|0.42|37.99|
|_GINI_<sup>a</sup>|31.46|5.56|22.00|43.70|27.35|3.05|23.40|34.60|29.62|4.93|22.00|43.70|
|_LMP_ACTIVE_<sup>a</sup>|0.04|0.02|0.01|0.10|0.16|0.07|0.06|0.34|0.10|0.08|0.01|0.34|
|_LMP_PASSIVE_<sup>a</sup>|0.06|0.05|0.02|0.19|0.23|0.12|0.03|0.49|0.15|0.13|0.02|0.49|
|_UBSA_<sup>a</sup>|48.48|13.40|20.00|73.00|68.97|6.23|60.00|82.00|57.75|15.41|8.00|81.00|
|_TAX_RATE_<sup>a</sup>|33.92|4.06|27.60|42.40|36.97|6.64|24.30|45.00|35.51|5.70|24.30|45.00|
|# obs.||35 [|14],|||34|[12],|||67 [27],|except f|or|
|[# countries]|_LM_<br>_LM_<br>_UBSA_<br>_T_|exce<br>_P_ACTIV_<br>_P_PASSIV_<br> 27 [12 ];<br>_AX_RAT_|pt for<br>_E:_31 [1<br>_E:_29 [ 1<br> _GINI:_34<br>_E_30[12|3];<br>2 ];<br>[14];<br>]||exce<br>_MIN_WA_<br>_GINI:_ <br>_TAX_RA_|pt for<br>_GE0:_14 [<br>31 [11];<br>_TE_31[11|5];<br>]|<br>_M_<br>_L_<br>_LM_|<br>_IN_WAG_<br>_MP_ACTI_<br>_P_PASSI_<br>_UBSA_ <br>_TAX_RA_|<br>_E0:_49 [2<br>_VE:_63 [2<br>_VE:_61 [<br>59 [25 ];<br>_TE_30[12|<br>0];<br>6];<br>25 ];<br> <br>]|
|Estimation sample|Ta|ble 3A, a|ll colum|ns;|T|able 5, a|ll column|s;|Ta|ble 6, col|umns [4|]-[6];|
||Tab|le 4,col|umns[2]|-[5]|T|able 6,c|olumns[1|]-[3]|Ta|ble 7,col|s.[1a], [|1b], [1c]|

_Notes_ : Countries covered: Eastern & Southern Europe – see Notes to Table 3A; Western & Northern Europe – see Notes to Table 5; Europe (27 countries) – EU-27 (except for Cyprus, Luxembourg, and Malta), Norway, Russia, and Ukraine.<sup>a</sup> Lagged 1 year.<sup>b</sup> Lagged 1 quarter. _Sources:_ Calculation with data described in Table A1.

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