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Dissemination Standards Bulletin Board Special Data Dissemination Standard (THE SUMMARY METHODOLOGY STATEMENT HAS BEEN PROVIDED BY EURO AREA, WHICH IS SOLELY RESPONSIBLE FOR ITS ACCURACY AND COMPLETENESS. AT THE TIME OF POSTING, THE STATEMENT WAS REVIEWED BY THE IMF FOR CONSISTENCY WITH THE METADATA BASE PAGE DESCRIBING DISSEMINATION PRACTICES. SUBSCRIBERS ARE REQUIRED TO PROVIDE UPDATES TO THE STATEMENT, AS NEEDED, AND ARE EXPECTED TO MAKE OTHER IMPROVEMENTS, AS WARRANTED, TO ENHANCE TRANSPARENCY) Euro Area Summary Methodology Labor market: Wages/Earnings - Labour Cost Index Last Posted: Mar-8-2007 Last Updated: Dec-15-2006 Contact Person(s)          Printer Friendly Page   Unit F2 Labour market statitics , European Statistical Data Support: http://epp.eurostat.cec.eu.int/pls/portal/url/page/PGP_DS_SUPPORT, Eurostat, Statistical Office of the European Communities, Luxembourg L-2920

I. Analytical Framework, Concepts, Definitions, and Classifications

2.1.1 Concepts and definitions The quarterly Labour Cost Index measures short-term developments in “average hourly labour costs”, defined as (total) labour costs divided by the corresponding number of hours worked in the quarter in question.The Labour Cost Index is defined by Council Regulation (EC) 450/2003 and the implementing Commission Regulation (EC) 1216/2003.  In the context of the Labour Cost Index, Labour Costs are defined as expenditure borne by employers for the purpose of employing staff. They include employee compensation, with wages and salaries in cash and in kind, employers’ social security contributions and employment taxes regarded as labour costs minus any subsidies received, but not vocational training costs or other expenditure such as recruitment costs and spending on working clothes (by contrast to multiannual and annual labour cost data). These labour cost components and their elements are defined in Commission Regulation (EC) No 1737/2005 amending Regulation (EC) 1726/1999 of 27 July 1999 implementing Council Regulation (EC) No 530/1999 concerning structural statistics on earnings and labour costs as regards the definition and transmission of information on labour costs. For the definition of hours worked see paragraphs 11.26 to 11.31 of Annex A, Chapter 11, to Council Regulation (EC) No 2223/1996 of 25 June 1996 on the European system of national and regional accounts in the Community. Apart from the overall Labour Cost Index, indices are also available for the labour cost components “wages and salaries” and “employers’ social security contributions plus taxes paid minus subsidies received by the employer” together with an index excluding “bonuses” - defined as bonuses and allowances not paid in every remuneration period. All labour cost indices are annual chain-linked Laspeyres indices. Trends in average hourly labour costs for an individual economic activity/country are weighted by the total labour costs associated with that activity/country, which are fixed for one year in order to obtain national or European aggregates. LCI data are presented in the form of index numbers (current reference year: 2000) and annual and quarterly growth rates (comparison with the previous quarter). 2.3.1 Classification/sectorization Index numbers and growth rates are made available for the overall and other indices by economic activity (General Industrial Classification of Economic Activities (NACE) Rev. 1.1 at section level for Sections C to K).

II. Scope of the data

2.2.1 Scope Scope of the data Data are available for the EU aggregates, EU Member States. LCI applies to all activities in sections C to K of NACE Rev.1. and represents all statistical units. The statistical unit can be the enterprise or local unit regardless of size, i.e. the labour cost indices cover all units in the NACE sections considered. The LCI will be extended to cover all activities in NACE sections C-O by 2009.

III. Accounting Conventions

2.4.2 Recording basis The quarterly data provided by Member States cover the whole calendar quarter. The labour cost indices are chain-linked Laspeyres price indices which use the year 2000 as the current reference year.

IV. Nature of the Basic Data Sources

3.1.1 Source data collection programs Member States may produce the necessary estimates by using surveys, other appropriate sources such as administrative data and  statistical estimation procedures. Different estimation methods are used, including the application of growth rates of the average hourly labour costs to the results of the latest structural survey, reference to separate growth rates for labour costs and hours worked, or the application of growth rates of some labour cost components to all or other labour cost components.

V. Compilation Practices

3.3.2 Other statistical procedures EU aggregates are obtained as weighted averages of the national data. Data communicated by individual countries are checked for internal consistency and correlation with earlier data. No further adjustments are made. The data are also made available with seasonal and working-day adjustments as well as deflated by the harmonised consumer price index. As the data are usually based on estimates, the most recently available are subject to revision. The data are never considered to be final. Though the first data supplied within the current legal framework relate to the year 2000, data going back to the first quarter of 1996 are available.

VI. Other Aspects

Footnotes

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