Statistics Iceland

Wage Statistics

Borgartuni 21A

IS-150 Reykjavik

Iceland

This report will consider all of the quality criteria of the Structure of Earnings Survey (SES), as referred in the Annex of the Commission Regulation (EC) No 698/2006 of 5 May 2006.

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New concept added with the migration to SIMS 2.0.
Information (content) will be available after the next collection.

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New concept added with the migration to SIMS 2.0.
Information (content) will be available after the next collection.

Not available.
New concept added with the migration to SIMS 2.0.
Information (content) will be available after the next collection.

Not available.
New concept added with the migration to SIMS 2.0.
Information (content) will be available after the next collection.

Not available.
New concept added with the migration to SIMS 2.0.
Information (content) will be available after the next collection.

Not available.
New concept added with the migration to SIMS 2.0.
Information (content) will be available after the next collection.

Not available.
New concept added with the migration to SIMS 2.0.
Information (content) will be available after the next collection.

Not available.
New concept added with the migration to SIMS 2.0.
Information (content) will be available after the next collection.

The data for SES 2010 is gathered from the ISWEL survey (Icelandic Survey on Earnings, Wages and Labour cost). The ISWEL survey is subject to possible errors due to the sampling methods applied and the quality of the PAYE register which the population is based on.

Data for the Structure of Earnings Survey 2010 are collected from two sources. First, Statistics Iceland conducts the Icelandic survey on wages, earnings and labour costs (ISWEL). The target population in ISWEL includes all legal units with more than 10 employees, both in the private sector and in municipalities. Second, full data was collected from the Ministry of Finance for governmental institutions.

In the private sector a sample is drawn from the ‘Monthly Pay as You Earn’ data. The data for the private sector includes the economic activities C, D, E, F, G, H, J and K according to NACE rev.2. These economic activities make over 80% of the private sector in Iceland. However, small enterprises are missing from economic activity J – so the coverage present is about 60%.

The public sector is covered by a sample of municipalities which is drawn according to geographical location and data from the Ministry of Finance. By those means the economic activities C, D, E, F, G, H, J, K, O, P, Q, and R are covered.

Statistics Iceland is striving towards a full coverage of ISWEL. For now, the economic activities of I, L, M, N and S are not fully covered and thus, data for those activities are missing in SES 2010. In addition the economic activity B is a remote part of the Icelandic economy.

Probability sampling

The ISWEL sample is a stratified cluster sample, where the sample unit is the enterprise and the observation unit is the employee. Within the private sector the target population contains all enterprises with 10 or more employees. The population frame is based on monthly PAYE register. PAYE register reflects the sum of the wages reported to the tax authorities.

The population is stratified in sections and subsections according to NACE rev. 2. Enterprise with more than A/m employees are selected with a probability of 1 (where A is the number of employees in the stratum and m is the number of enterprise to be selected from the stratum). For the rest of the population, a simple random sample is selected from each stratum.

In the public sector a sample is drawn from the municipalities in such a way as to achieve a certain proportion for each of the country's regions. As in the private sector, the population is defined as all wage earners working for municipalities that have 10 or more employees.

Non-probability sampling

Full coverage data were received for employees working for the central government. All employees working with in institutions with 10 or more employees are included.

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The ISWEL survey is performed by Statistic Iceland. Every month, each company sends a text file containing detailed information on earning structure and cost items for all employees. In addition, background data on the individuals and companies is collected. Contracts have been finalised with Iceland's leading software firms on writing computer programs that fit their own wage software and allow companies to submit standardised and detailed information electronically to Statistics Iceland on wages, labour cost, working hours and necessary background factors.

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New concept added with the migration to SIMS 2.0.
Information (content) will be available after the next collection.

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The SES data are used by Eurostat and selected results are published on Statistics Iceland’s website as comparison between countries. A statistical issue focusing on wage comparison is published shortly after data are available on Eurstoat’s website. It has not yet been tested who the main domestic users are, but the most likely users are institutions, analysts, news media and the public.

User satisfaction has not been measured.

The Icelandic data for the Structure of Earnings Survey 2010 includes the economic activities C, D, E, F, G, H, J, K, O, P, Q, and R (NACE rev. 2) that cover about 84% of the labour market (B-S) according to the Pay as You Earn register (PAYE). However, small enterprises are missing from economic activity J – so the coverage present in J is about 60%. Statistics Iceland is striving towards a full coverage of the Icelandic labour market. But, for now, the economic activities I, L, M, N, and S are not fully covered and thus, data for those activities are missing for Iceland in SES 2010. The economic activity B is a remote part of the Icelandic economy.

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Sampling errors can occur as the data for the private sector and the local governments are based on a stratified cluster sample. The population frame is based on the monthly Pay As You Earn data (PAYE).

Please see the attached document Sampling errors.

Some non-sampling errors can occur in the data.

Included in the Icelandic SES 2010 sample are the following economic activities: C, D, E, F, G, H, J, K, O, P, Q, and R (NACE rev.2). The economic activities I, L, M, N and S are not yet included in the ISWEL survey. According to the PAYE register 2010 about 5% of employees worked in the economic activity I, 1% in L, 4% in M, 3% in N, and 3% in S. The economic activity B is a remote part of Icelandic economy, less than 0.1% of the employers worked within that economic activity according to the same source.

As the ISWEL sample is based on the PAYE register errors in NACE classification in the PAYE register can have an impact on the coverage of the ISWEL survey.

Please refer also to the attached document Size of the population and sample in SES 2010.

The sampling frame is built on the PAYE register, which in turn is the target population. Thus over-coverage is non-existing.

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By using number of weeks which the gross annual earnings relate to (variable 3.1) and the share of a full-timer’s normal hours in the reference month (variable 2.7.1) to gross up the annual earnings to a full year earning an error can occur. This is the case as working hours in the reference month do not necessarily represent hours worked in other months of the year, due to seasonality in the labour market. This is especially true for part-time workers. In order to correct for this the variable 3.1 has been adjusted as explained in the attached document Validation of microdata on Variable 3.1

Some other measurement errors can occur. The main concerns relate to the educational level and length of service in the enterprise. These two variables are coded in the ISWEL survey but the accuracy of the coding is not satisfactory. To get a better estimation of these two variables data were sought from other sources, both registers and other surveys conducted by Statistics Iceland. However, the educational level might be underestimated as many people seek higher education in other countries and therefore do not appear in registers in Iceland. The length of service in the enterprise might be underestimated as data are only available back to 1998 in registers in a format that can be used at this time.

In addition, the inclusion process for the data for Ministry of Finance is not complete and thus some errors in ISCO classification of employees in the central government can occur.

Lastly, annual bonuses and allowances not paid in each pay period (variable 4.1.1), could be underestimated as corrections on such payments are not included in the variable. Nevertheless, these corrections are included in, gross earnings in the reference month (variable 4.1).

All business units are obligated to respond to Statistics Iceland. As information is collected directly from these sources and not from individuals, non-response errors are minimal. To further minimize the non-response errors good relations are kept with the business units and special work methods are used in the data collection and quality checking.

In spite of all efforts, small non-response errors can occur. These are mainly due to two reasons. First, a technical error can occur with a certain business unit and thus it may be unable to provide data for a period of time. Second, individual transfers can be erroneous, due to human factors, and these transfers are eliminated from the dataset. Weights are adjusted, both for local units and individuals to minimize the impact of these non-response errors.

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The data are collected directly from the software each business unit uses for calculating wages. Taking advantage of data collection by direct access minimises the bias caused by recording.

Imputation is used for some of the data on educational level, length of service in the enterprise and entitled annual days of holiday leave. Imputation is not used on other variables, therefore the imputation rate is not calculted.

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The ISWEL survey is based on a lengthy tradition of collecting data directly from the software each business unit uses for calculating wages. Every month, each business unit sends a text file containing detailed information on earning structure and cost items, together with background data on the individuals and companies. Thus, all data retrieved from the ISWEL survey are collected simultaneously.

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Data was deliverd on time.

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The data, which the SES 2010 is based on, are collected monthly and complies with most mandatory points drawn up in the council regulation no 530/1999, and subsidiary commission regulations. However, due to some specific characteristics of the Icelandic labour market some incoherence can occur.

• Statistics Iceland is striving towards a full coverage of ISWEL. For now, the economic activities I, L, M, N, and S are not fully covered and thus, data for those activities are missing in SES 2010. In addition the economic activity B is a remote part of the Icelandic economy.
• In Iceland each legal unit has a unique identification number and the enterprise is considered to be the same as the legal unit.
• In coherence with former submission the local unit is defined on the basis of identification number (the same as above) and NACE to a 5 digit level.
• In order to be included in the sample the employee had to have a minimum of 10 normal working hours in October 2010.
• When defining full-time/part-time employees all working hours are considered. In some industries a considerable part of the employees work mainly (and sometimes only) on overtime rates, as their main working hours are during nights and weekends. Thus, all hours are considered when defining full-time employees.
• The grossing up factor for the local unit is based on the number of local units in NACE sections on a 2 digit level.

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The ISWEL survey, which SES 2010 is based on, has not undertaken major changes in methods or definition of variables since 1998. Still, all processes and quality checks are under constant revision in order to improve the quality of the data and thus some changes has been made to the processing and editing of data. The economic activities C, F, G and H, in the private sector, are included since 1998, in 2002 part of J was included, in 2005 the section K was included, and in 2008 sections D and E were included. Inclusion of the public sector, to monthly data collection, is an ongoing project.

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Comparison of statistics with national accounts

Data from National Accounts are not available.

Comparison of statics with Labour Force Survey (LFS)

When comparing data from SES to LFS it must be kept in mind that the survey designs are different. In SES the observation units (employees) are drawn into a sample from a stratified cluster sample, where the local units (with 10 or more employees) are stratified by two-digit level NACE rev.2 and size. All individuals within the local unit are observed. In LFS the sample is drawn from the national register, stratified by gender and age. As the sample designs are different and the population of Iceland is relatively small (about 320,000) the datasets may differ. In addition, all self-employed and employees in small enterprises are missing from the SES data. Furthermore, the definition of part-time employees differ a little, as in SES part-timers are defined from the contractual working time, where as in LFS part-timers are defined from a set amount of working hours. As contractual working time differs between contracts this can lead to a disparity in the data sets.

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Coherence between provisional and final statistics

Data are final.

Users will be informed via press release on the Statistics Iceland website.

The SES data, along with metadata, will be published on Statistics Iceland website www.statice.is after publication on the Eurostat website.

Eusostat database.

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The SES data, along with metadata, will be published on Statistics Iceland website www.statice.is after publication on the Eurostat website.

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All efforts are made to keep the cost and burden of the enterprises surveyed for SES 2010 at a minimum. As the data are based on the ISWEL survey, no additional data collection was necessary from enterprises apart from the regular monthly data collection related to ISWEL. In the ISWEL survey contracts have been finalised with Iceland's leading software firms on writing computer programs that fit the enterprises’ own wage software and allow companies to submit standardised and detailed information electronically to Statistics Iceland on wages, labour cost, paid hours and necessary background factors. Thus, the expense and nuisance companies associate with data collection and the time lost through reporting is kept to a minimum after the inclusion process is finished. During the inclusion process a specialist from Statistics Iceland visits the business units and assists with the ISCO classification and other classification matters in order to maintain coherence between enterprises. This is important, since a substantial number of business units are obliged to participate in the survey on a regular basis so as to maintain a representative sample.

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Please see also further explanations to Keys, Variables and Grossing-up factors in the attached document Validation of microdata.