STATEC

LABOUR MARKET AND EDUCATION

STATEC

Centre Adm. Pierrre Werner

13, rue Erasme BP 304

L-2013 Luxembourg

The labour cost index contains the different components of labour costs (D1+D4-D5) defined by the  (CE) 1737/2005:

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. 2 for Sections B to S).

NACE Rev. 2 Sections B to S

In the context of the Labour Cost Index, Labour Costs are defined as core 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 with multiannual and annual labour cost data). These labour cost components and their elements are defined in Commission Regulation (EC) No 1737/2005 of 21 October 2005 amending Regulation (EC) No 1726/1999 as regards the definition and transmission of information on labour costs.

The quarterly Labour Cost Index measures short-term trends in "average hourly labour costs", defined as (total) labour costs divided by the corresponding number of hours worked in the quarter in question (see Regulation (EC) No 450/2003 of the European Parliament and of the Council of 27 February 2003 concerning the labour cost index). Quarterly changes in hourly labour costs are calculated first for each economic sector (NACE Rev. 2. Sections) and then aggregated to the whole economy keeping a fixed structure (i.e. fixed weights) by industry (Laspeyres index). Therefore, the LCI does not discount the compositional effect derived from a change in the composition of employment within an economic sector. This means that, for instance, the LCI may increase due to the redundancies of low paid workers within one sector.

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., which are fixed for one year in order to obtain national aggregates.

LCI data are presented in the form of index numbers (current reference year: 2012) and annual and quarterly growth rates (comparison with the previous quarter).

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 (Labour costs other than wages and salaries)". For some Member States, an index excluding "bonuses" - defined as bonuses and allowances not paid in every remuneration period is also available.

For the NACE aggregates in the LCI, item and country weights are applied. These are available as shares of 1000, i.e. for item weights, each single weight sums up to 1000 for the total labour costs in a given country for the aggregate B to S. For the country weights, they are given in relation to the total labour costs for the country aggregate.

The statistical unit is the enterprise, regardless of size, i.e. the labour cost indices cover all units in the NACE sections considered.

LCI applies to all activities in sectors  B to S of NACE Rev. 2 and represents all statistical units.

Luxembourg

Data are available since the 1^st quarter of 1996 for NACE Rev 1.1 (until the 4^th quarter of 2008)  and since 1^st quarter of 2000 for NACE Rev 2.

The labour cost indices are chain-linked Laspeyres price indices which currently use the year 2016 as reference year.

The historical NACE rev. 1.1 series are published with the year 2000 as reference year.

The LCI relies on administrative data, ie on social security records, provided by the "Inspection générale de la sécurité sociale" (IGSS).

The item D1 and its sub-components stem from the social security registers. These registers are updated every month. D4 equals 0 in Luxembourg for all enterprises. D5 are estimated using the Labour Cost Surveys (LCS). The levels of these items come from the LCS, and are thus updated every four years.

The LCI mainly relies on social security records, provided by the “Inspection générale de la sécurité sociale” (IGSS).

Data communicated by the Social Security is checked for consistency.

The current data delivery is checked to the previous one.

The revisions are checked for every quarter (full time series are delivered).

B-N and B-S aggregates are compared, both value and annual rate for NSA, WDA, SA.

The annual rates for figures are checked for consistency, i.e. rate of total index should be in-between the rates of the components.

Labour costs are measured in current prices in EURO.

Seasonally and working-day adjusted data are also made available.

For a detailled quality report on Adjustments, please refer to the annexed Excel file at the end of this report.

On arrival at STATEC, LCI data from the Social Security is checked for completeness and consistency.

The overall quality is deemed to be good, with very limited revisions.

The Labour Cost Index (LCI) has a lot of features making it unique and relevant in Luxembourg:

• It is available at t+70 days after the end of each quarter, i.e. faster than any other labour cost or wage indicator in Luxembourg;
• There is comparable data for other European countries;
• Availability of breakdowns by activity (NACE rev2 sections) - LCI applies to all activities in sectors  B to S.
• Distinction between wages and other labour costs
• Long and overlapping series: 1995 to 2008 for NACE rev1 and 2000 to date for NACE rev2

The main user of the LCI is EUROSTAT. The most important national user is STATEC. Indeed, the LCI is used in various publications and analyses. Other more occasional users are professional Chambers, Ministries as well as the press.

There is no systematic and formal assessment of the users’ satisfaction. Nevertheless, the small size of the national user community enables STATEC to have a direct contact with the users. As a result, STATEC can be very responsive to the users’ needs. The informal feedback suggests that the users’ needs are generally satisfied.

Luxembourg fulfills the requirements of Regulation (EC) No 450/2003.

The data series of LCIs, starting with the first  quarter 2009 the labour cost index, are calculated and provided in accordance with the Regulation No 1893/2006 of the European Parliament and of the Council, by NACE Rev. 2 sections and aggregates for all components of the index:

• total labour cost (LCI_TOT),
• wages and salaries (TOT_WAG),
• other labour costs (TOT_OTH),
• total labour costs excluding bonuses (TOT_TXB).

The index series are prepared and delivered in all three forms:

i) non-adjusted,

ii) working-day adjusted,

iii) seasonally and working-day adjusted

The LCI is subject to frequent but small revisions, due to corrected or updated rawdata lying underneath the index. The aggregates are rarely revised by more than 0.2 percentage points in either direction.

Not applicable as administrative data is used.

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See below.

Employment (in 1000), 2022

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Not available.

The use of administrative data (official social security records) should limit measurement errors.

Not applicable as administrative data is used.

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Data is seasonally adjusted via jdemetra+ 2.1 via TRAMO-SEATS. STATEC IS using direct method for seasonal adjustment.

Data is revised each quarter for the full time series.

The data published for the latest quarter is based on provisional social security files.

Each quarter is then revised the following quarter based on a revised social security file.

Finally, each quarter is revised a full year later based on the final revision of social security data.

In 2009, a major revision had to be done. This has already been documented in a previous quality report. However it is important to mention it again as it might have an impact on the results due to the chained nature of the index. On the 1st of January 2009, there has been a major reform in Luxembourg’s social security system. Before that date, the social security system made a distinction between two types of salaried workers: the blue-collar workers (“ouvriers”) and the white-collar workers (“employés”). There were differences between these two, i.a. with respect to sick-pay, overtime pay and severance payments. In 2009, the distinction between the blue and white collar workers has been abolished. This change has had some implications on the way the social security authorities collect and record data. Especially, the wages and hours paid by the employers are recorded differently as of January 2009. Unfortunately this has an impact on the LCI. The problems became apparent bit by bit, as the data arrived. This change has led to two more important revisions of the 2009q1 data to be transmitted in June 2009.

The annexed table shows the revisions of the quaterly indexes for the total labour cost for sections B to S (non seasonally adjusted), as well as the size of the revisions in %.

According to the legal obligation, data are sent to Eurostat 70 days after the end of the reference period.

70 days.

70 days.

The LCI has always been delivered on time or even before the deadline, except for Q4, where there was a delay in the availability of the source data.

Deadlines and Dates of Actual Transmissions for 2022 :

No changes in the data transmission are foreseen in the near future. All the deadlines should be kept as described above.

Punctuality is respected (70 days after the end of the reference period).

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As documented earlier in this report a change has occurred in the social security records. This change hampers the comparability of the indices between 2009 and the previous years. So to ensure comparability, the series from the social security records had to be adjusted.

The comparability issue was caused by the way the hours are recorded in the social security files. In the pre-2009 data the total hours corresponded in many cases to yearly averages. Thus, a full-time worker, with no overtime and no sick-leave was supposed to have worked 173 hours per month, independently from the number of potential working of each month. In the new system, the months have a variable length that takes into account the number of working days. Thus, the “benchmark” workers (full-time - no overtime - no sickness) are attributed the real number of working hours of that month. Consider the following example. Using the old rules, a benchmark worker would have been attributed 173 hours in January 2009. However, in January 2009, there have been 21 working days (Monday – Friday, excluding bank holidays). Thus, in the new system, the benchmark workers are attributed 21*8 = 168 hours.

It was possible to estimate a correction factor to be applied to the 2009 data. This factor makes the hours recorded in 2009 comparable to those recorded before 2009.

Data is comparable from 2009 to the present day.

Comparability over NACE sections is guaranteed.

Not available.

Quarterly hours worked according to ESA95 are not yet available for Luxembourg.

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The LCI series are published and commented in the bi-annual “Note de conjuncture”:

https://statistiques.public.lu/fr/support/recherche.html?q=note+de+conjoncture

The LCI is published on Luxembourg’s “Portail des Statistiques” according to the Special Data Dissemination Standard (SDDS) of the FMI:

https://statistiques.public.lu/fr/themes/economie-finances/sdds-plus-ecofin.html

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Micro-data is not disseminated.

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Further information on definitions and methods are available at the dedicated section of STATEC and or EUROSTAT website.

Metadata are available on the website of STATEC. Also Eurostat publishes the LCI metadata.

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Individual data is kept secret. Aggregate data is made public according to EUROSTAT.

The LCI contains aggregated figures, so identification of individual bussiness aren't possible. No further treatment should take place.

Not available.