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Germany

Reference metadata describe statistical concepts and methodologies used for the collection and generation of data. They provide information on data quality and, since they are strongly content-oriented, assist users in interpreting the data. Reference metadata, unlike structural metadata, can be decoupled from the data.

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Labour cost index (lci)

National Reference Metadata in ESS Standard for Quality Reports Structure (ESQRS)

Compiling agency: Federal Statistical Office of Germany

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The labour cost index is not a survey, but a complex calculation system that links existing statistics. The basic parameter of the calculations are "labour costs per hour worked". The labour cost index reflects the quarterly development of total labour costs. It offers two differentiation options: On the one hand, the development of labour costs can be shown broken down by individual economic sections. In addition to time series for the manufacturing industry and the service sector, time series are calculated for the manufacturing industry or the construction industry, for example. On the other hand, the index makes it possible to divide labour cost development into the two main components of labour costs: the index of gross earnings and the index of non-wage labour costs.

The labour cost index allows current insights into the development of the cost situation of the economy. On the one hand, it contributes to the assessment of Germany's international competitiveness as a production location. On the other hand, it signals risks to monetary stability that can arise from cost increases for producers. The labour cost index was mandated by EU regulations and thus allows a timely comparison of the labour cost developments of all 27 European member states on the basis of a harmonised methodological foundation.

The contribution of a mix of sources to the calculation of the German LCI, implies keeping into account a multitude of factors when evaluating the overall quality of the indicator. This report tries to make an overview of these factors, focusing on the main issues affecting the quality outcomes.

The organization of the report follows the criteria on statistics quality defined in the EU regulations and particularly the annex 1 of LCI Regulation No. 1216/2003.

 

Annexes:
Annex 1: EU regulation No. 1216/2003

Not Applicable

Labour costs per hour worked and subdivided in salaries and other labour costs.

Enterprises.

Enterprises with ten or more employees.

Germany.

Not Applicable

The basis used to calculate the labour cost index are the results of the labour cost survey. These data, which are collected every four years, are updated quarterly using various data sources. When new data become available from the labour cost survey, a benchmarking exercise is performed for the years between two labour cost surveys. The extent to which revision is caused by the benchmarking exercise can be an indicator of the labour cost index quality. As regards benchmarking between 2016 and 2020, the following adjustments were required for manufacturing, which is the largest economic sector. Labour costs had to be revised by an average annual 0.5% and hours worked by 0.1%.

Not Applicable

Source data from the labour cost survey is extrapolated using the other data sources mentioned in chapter 3.1.

The following data sources are used in calculating the labour cost index:

Table 1: Database for calculation the labour cost index.

 

Periodicity

Type of data

Components used

Survey unit

Data source

Labour cost survey

every four years

Sample

gross earnings + employers’ social contributions

enterprise

Federal Statistical Office

Earnings Survey (from 2022 Q1 onwards)

monthly

Sample

employers’ imputed social contributions to old-age pension schemes and health care schemes paid hours

establish-ment

Federal Statistical Office

National accounts

quarterly

accounting system

expenditure on company old- age pension schemes

accounting system

Federal Statistical Office (data of the Pension Guarantee Association)

Employment accounts

quarterly

accounting system

persons in employment accounting system

accounting system

Federal Statistical Office

Working time and volume of measurement of the Institute for Employment Research

quarterly

accounting system

leave and holidays, working time accounts effects and compensation for calendar effects days of sick leave, days of paid leave and holidays

accounting system

Institute for Employment Research

 

As of the 1st quarter of 2022, the basis for the development of earnings was changed from the Quarterly Earnings Survey to the (monthly) Earnings Survey.

The labor cost survey and the earnings survey cover all economic sections relevant for the labor cost index. In contrast to the (monthly) earnings survey, the labor cost survey has a cut-off threshold: it only surveys companies with ten or more employees. In order to ensure a comparable methodology over time after the changeover from the Quarterly Earnings Survey to the Earnings Survey, only establishments with ten or more employees are included in the model calculation by the Earnings Survey for estimating the earnings parameters.

Not Applicable

According to the Commission Regulation (EC) No. 1216/2003 of 7 July 2003, Member States shall transmit the quarterly results of their LCI statistics to the Commission (Eurostat) no later than 70 days after the end of the reference period.

Table 7: Timeliness and Punctuality in the delivery of LCI

Year

Quarter

Target Date

Actual date

Delay in days

2018

1. Quarter

08 June 2018

08 June 2018

-

2.Quarer

07 Septemeber 2018

07 September 2018

-

3.Quarter

07 December 2018

07 December 2018

-

4.Quarter

11 March 2019

11 March 2019

-

2019

1.Quarter

07 June 2019

07 June 2019

-

2.Quarter

06 September 2019

06 September 2019

-

3.Quarter

09 December 2019

09 December 2019

-

4.Quarter

10 March 2020

10 March 2020

-

2020

1.Quarter

09 June 2020

09 June 2020

-

2.Quarter

08 September 2020

08 September 2020

-

3.Quarter

09 December 2020

09 December 2020

-

4.Quarter

11 March 2021

11 March 2021

-

2021

1.Quarter

09 June 2021

09 June 2021

-

2.Quarter

08 September 2021

08 September 2021

-

3.Quarter

09 December 2021

09 December 2021

-

4.Quarter

11 March 2022

11 March 2022

-

2022

1.Quarter

09 June 2022

09 June 2022

-

2.Quarter

08 September 2022

05 September 2022

-

3.Quarter

09 December 2022

24 November 2022

-

4.Quarter

11 March 2023

13 March 2023 1)

-

2023

1.Quarter

09 June 2023

07 June 2023

-

2.Quarter

08 September 2023

07 September 2023

-

3.Quarter

09 December 20231)

07 December 2023

-

4.Quarter

10 March 20241)

08 March 2024

-

As the delivery date fell on a Saturday or Sunday, Eurostat also accepted the following Monday as a punctual delivery date.

With the revision taking effect from the 4th quarter 2004, the computation system of the labour cost index was geared to the results of National Accounts (NA). That caused a high coherency of the two statistics, which is reflected by only small deviations between highly aggregated unadjusted time series of the compensation of employees (NA) and labour costs (labour cost index). Starting with the first publication of the 1st quarter 2010 the calculation of the LCI was changed retrospectively from the 1st quarter 2007: The Quarterly Earnings Survey became the new main data source. Therefore, differences have occurred between the LCI and compensation of employees from 2007 onwards (with an exception: from 2012 to 2013 again National Accounts were the fundamental data source for the calculation of the LCI.)

The definitions of the cost components which the labour cost index is based on correspond to those used in the context of the labour cost survey. The definitions of the cost components used in the labour cost survey are harmonized with those of the European System of Accounts (ESA). Hence, there is consistency between national accounts and the labour cost index. The EU regulations concerning the labour cost index form the basis for obtaining results that are comparable at the European level. Regional results for Germany are not available.

There are conceptual and methodological differences concerning the main data source used to compile LCI between the time series of different quarters. Main data source:

  • 1996 - 2006: National Accounts
  • 2007 - 2011: Quarterly Earnings Survey
  • 2012 - 2013: National Accounts
  • 2014 - 2021: Quarterly Earnings Survey
  • From 2022 Earnings Survey onwards