STATISTICAL SERVICE OF CYPRUS

Labour Market Statistics Division

The Statistical Service of Cyprus conducted the Structure of Earnings Survey (SES) for the year 2010, during 2011 and 2012. This was the third time that the SES was conducted in Cyprus. The survey was based on the Council Regulation No. 530/1999 and the Commission Regulation No. 1916/2000 as amended by Commission Regulation 1738/2005. The data collection and verification was completed by July 2012 and raw data were sent to Eurostat by the 1st of August 2012. The data sent covered enterprises with 1 or more employees, in sections B – S of the NACE Rev 2 Classification of Economic Activities System, of the European Union. Data were sent for 1.153 enterprises in Cyprus, representing 32.566 employees in the sample.

The aim of the Report is to evaluate the quality of the data from the Structure of Earnings Survey 2010 (SES 2010) in Cyprus, focusing on the six main areas of interest, as per Commission Regulation 698/2006:

1. Relevance
2. Accuracy
3. Punctuality and Timeliness
4. Accessibility and Clarity
5. Comparability
6. Coherence

The report is based on the Commission Regulation (EC) No 698/2006 of 5 May 2006, implementing Council Regulation (EC) No 530/1999 as regards quality evaluation of structural statistics on earnings, as amended by Commission Regulation (EC) No 1022/2009 of 29 October 2009.

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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.

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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.

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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.

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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.

The Structure of Earnings Survey 2010 was a sample survey. The sampling procedure applied was divided into two stages. For the first stage, the sample was drawn using stratified, probability proportional to size sampling and for the second stage, the sample was drawn with the stratified simple random sampling method. Further methodological information relating to the SES 2010, is presented in the following:

1. The survey

The Statistical Service of Cyprus decided to integrate the annual survey on Wages, Salaries and Hours of Work with the SES, since the annual survey was in many ways similar to the SES. This was achieved by extending the existing survey in order to collect data relating to regulatory variables concerning the enterprise and designing an additional questionnaire, to cover any regulatory variables that concerned the employee and were not covered by the annual survey.

Both surveys were conducted by means of personal interviews.

2. The sampling frame

The sampling frame for the Structure of Earnings Survey 2010, covered the NACE Rev. 2 sections B-S (including O), and included enterprises with 1 or more employees, in the private, public or semi-government sector.

The sampling frame was constructed, using the Business Register of the Statistical Service.

3. The sample design

The sampling procedure applied was divided into two stages, employing the enterprise as the primary sampling unit (first stage) and the employee as the secondary sampling unit (second stage).

4. Selection procedure - Stratification

First stage

In the first stage of the sampling procedure, the selection of enterprises to be included in the sample was made. The enterprises were selected using the probability proportional to size sampling procedure. The population of enterprises was stratified by economic activity (NACE.Rev.2 at the two-digit level) and within each NACE.Rev.2 division, by employment size class. No regional breakdown was conducted, since the NUTS1 level refers to the country level in the case of Cyprus. This was also the reason why it was preferred to hold the survey at the enterprise level and not at the local unit level.

Thus, the enterprises were stratified into 82 NACE groups (B – S at the 2-digit level) with the following employee size classes per group:

Within each stratum, the number of enterprises to be included in the sample was decided, in order to achieve adequate representation.

Second stage

The second stage of the sampling process concerned the selection of employees.

The sampling frame for the selection of the employees was actually the set of all employees of the enterprises selected in the first stage of the sampling procedure. This was obtained from the Wages and Salaries Survey 2010, where all employees of the selected enterprises were recorded (occupation, full-time or part- time, monthly paid or weekly paid, etc.).

The employees within each enterprise were stratified according to the following criteria:

1. Full-time or part-time employee
2. Monthly paid or weekly paid
3. Occupation (ISCO-08 at the 4-digit level)

Then, a simple random sub-sample was selected within each stratum. The number of employees from each stratum to be included in the sample was determined as follows:

The stratified sampling procedure ensured that all occupational groups were adequately represented for each type of employee (full-time or part-time, monthly paid or weekly paid).

5. Sample size

The final sample of enterprises (respondents) consisted of 1.153 enterprises from all over Cyprus (government controlled area), covering NACE Rev.2 sections B to S. These enterprises represented
32.566 employees (excluding non-responses), of whom 31.568 were full-timers and 998 were parttime employees.

The 1.153 enterprises in the final sample of the SES represent 2,7% of the total number of enterprises in the sampling frame for the survey (43.314 enterprises), while the number of employees in the final sample, represents 10,3% of the total number of employees in the sampling frame (314.977 employees in total).

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The Structure of Earnings Survey was conducted by means of personal interviews. Thus, no questionnaires were sent out to be filled by the enterprises. They were only sent out for information purposes.

At a first stage the questionnaires were checked by the controlling officers as soon as they were filled out, in order to clarify and correct any misleading or inaccurate data. Then, the coding of the questionnaires occurred.

A software programme was developed in order to perform plausibility checks on the data of the survey, after they were entered into the computer system. The plausibility checks were performed simultaneously with the data collection and the data keying phase (as soon as the software programme was developed).

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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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No user survey has been carried out to determine the needs of users and to which degree they are met.

No user survey has been carried out to determine the needs of users and to which degree they are met.

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Probability Sampling

Coefficients of variation  (C.V.) were calculated for the grossed-up results of the SES 2010, for the variables:

• Gross earnings in the reference month
• Average gross hourly earnings in the reference month

Non-probability sampling

The SES 2010 was based on probability sampling. Thus, no lack of precision due to non-probability sampling occurred in this survey.

Probability Sampling

The attached document Coefficients of variation presents the coefficients of variation (C.V.), for the grossed-up results of the SES 2010, for the variables:

• Gross earnings in the reference month
• Average gross hourly earnings in the reference month

The above are broken down by:

1. Full-time (separately for men and women) and part-time employees,
2. NACE section,
3. Occupation (ISCO -88 at the 1-digit level),
4. Age band (under 20, 20 – 29, 30 – 39, 40 - 49, 50 – 59, 60 and over),
5. Size band of the enterprise (1 – 9, 10 – 49, 50 – 249, 250 – 499, 500 – 999, 1000+)

Please note that no breakdown by NUTS level 1 is provided, since at this level, the whole of Cyprus is considered to be a single region. The estimator used for the coefficients of variation is the sum of gross earnings in the reference month and the average of gross hourly earnings in the reference month.

Overall, the coefficients of variation produced for the above breakdowns lie within an acceptable range. Larger coefficients of variation are observed in groups with a smaller number of observations in the sample. However, even in such cases, the number of observations is large enough and all cells are deemed to be sufficiently reliable. Additionally there are some cells or groups that are not considered to be homogeneous, and thus higher COVs are observed (e.g. Nace Section S includes activities of a very different nature and the earnings can fluctuate quite a lot).

Non-sampling errors encountered can be classified into:

-Coverage errors

-Measurement and processing errors

-Non-response errors

-Model assumption errors

Coverage errors

Coverage errors observed in the survey refer to misclassifications, under-coverage and overcoverage errors. The SES 2010 covered enterprises with at least 1 employee, in the areas of economic activity defined by sections B – S of the Nace Rev.2 classification system. The initial sample of the survey was 1.481 units (including the government sector).

Misclassifications

Misclassification refers to incorrect classification of units that belong to the target population. All misclassification errors identified in the SES 2010, were corrected in order to obtain a more realistic representation of the labour market in the sampling frame and the sample. Where appropriate, the weights of the affected enterprises were adjusted.

Misclassification with respect to the size-groups:

In the SES 2010, certain misclassifications in the size groups of the enterprises were identified and corrected. In order to correct the misclassification errors, all of the enterprises where the total employment was not consistent with the size group in the sampling frame were identified. Then, they were reclassified into the correct size groups, adjusting the weights of the enterprises accordingly. The table below presents a detailed analysis of the misclassifications.

Number of misclassified units by Size-Group

Misclassifications in Size-Groups: 70 out of 1.481 = 4,73% of initial sample.

Misclassification with respect to the economic activity:

During the data collection process, misclassifications were identified in the economic activities of enterprises in the sample. In order to correct the misclassification errors with respect to the economic
activity, all the enterprises where the economic activity reported was not consistent with that of the sampling frame were identified. Then, they were reclassified into the correct NACE groups, adjusting the weights of the enterprises accordingly.The table below shows misclassifications in the economic activity of enterprises at the NACE 2 digit level.

Please refer also to the attached document Misclassification.

Misclassifications in Economic Activities (2-digit level): 85 out of 1.481 = 5,74% of initial sample.

Under-coverage errors

Under-coverage errors refer to errors either due to units not included in the frame (real birth or demergers) or to wrongly classified units that were excluded from the frame, when they should have been included.

There were indeed some enterprises which were not included in the original frame for selection, because they were new births or because their status was excluded from the target frame for selection by mistake. There were 5 new births which were considered significant, 1 enterprise that was not recorded in the business register at all and 176 enterprises that were mistakenly excluded from the target frame for selection (but were included in the business register).

Since the sample selection had already taken place before discovering the above under-coverage errors, it was decided to conduct further “supplementary” sampling on the above three categories.

Therefore the following where selected to be included in the sample:

• 3 out of 5 new births,
• 1 out of 1 enterprise that was not recorded at all in the frame (because there was no representation at all for the specific size group and NACE) and
• 4 out of 176 enterprises that were excluded from target frame.

Please note that the selection procedure took into account the categories (size group and Nace) that were already represented in the sample and those that were not, and needed to be represented in the sample. The enterprises above are included in the number of enterprises of the initial sample for the survey.

Over-coverage errors

Over-coverage errors observed in the SES 2010, derived from the following:

• Dead or inactive units (eg. temporarily closed)
• Misclassified units that are in fact out of scope
• Duplications

Dead or inactive units.

During data collection, 96 units were identified as dead or inactive units (6,48% of initial sample). These units had to be removed from the sample, and the weights of units that remained in the sample were adjusted accordingly.

Misclassified units in fact out of scope

76 units in the sample were identified as in fact out of scope (5,13% of initial sample). This referred to enterprises reported to have at least 1 employee but in fact this was not the case, as there were only the owners or family members working in the enterprise, with no fixed regular remuneration. These units were removed from both the sample and the frame, and the weights of the remaining
units were adjusted accordingly.

Duplications

There was only 1 case of duplication in the sample frame. The duplicate enterprise was removed from the sample.

Over-coverage errors: 173 out of 1.481 = 11,68% of initial sample.

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Survey Instrument Errors

The SES 2010 was the third survey of the series conducted in Cyprus. Therefore, the questionnaire designed, was actually an improvement of the previous questionnaires, accommodating all suggestions for improvement in the layout received from the feedback of the previous surveys.

The questionnaire consisted of four pages and contained all the compulsory variables defined in the regulation for the SES 2010 and a number of optional variables. Some of the data requested were not as straightforward to understand as other. Thus, to prevent any misunderstandings, explanatory notes were prepared, providing detailed explanations on all the variables, as well as guidance on what to include and what to exclude from each variable.

Mode of Data Collection Errors

Data for the SES 2010 were collected by means of personal interviews. The interviewers were trained specifically for the Structure of Earnings Survey and then, they got in touch with the enterprises in the sample, in order to visit them and collect the data.

In most cases an employee of the enterprise would co-operate with the interviewer from the Statistical Service and provide the necessary information. In such cases, the errors were kept to a minimum, since the interviewers were familiar with both the questionnaire and the information needed for the survey.

In other cases the enterprise would provide the interviewer with administrative sources (accounts, payrolls, etc.) and ask them to locate and record the information needed without any further help. In these cases, since the questionnaires were completed by the interviewers the errors were minimised. However, some mistakes occurred in cases where the information provided by the enterprises was not fully understood by the interviewers.

In even fewer cases, the interviewers made the necessary explanations to the contact person from the enterprise and then, the enterprise would take the responsibility of filling out the questionnaires. In such cases the control over the data was even smaller for the Statistical Service, and the probability of errors in the data was larger.

In all of the above cases, the completed questionnaires were sent back to the Statistical Service, where the controlling officers would check the questionnaires for any inconsistencies, uncompleted fields or other errors, and if any of these occurred, the enterprises were contacted again in order to clarify or correct the information given.

Respondent Errors

Respondent errors are most common in surveys where questionnaires are filled out by the respondents. Since in the SES 2010 the method used was that of personal interviews, such errors were minimised. Nevertheless, in the few cases where the respondents filled out the questionnaires, the interviewers and the controlling officers were extra careful in order to locate and correct any misleading data or mistakes.

In addition to the above, consistency checks were designed (using a software programme), in order to locate any inconsistencies in the data, which might have resulted from the provision of wrong information by the enterprises.

Information System Errors
These errors occur when the information system of the enterprise is unable to provide the data required for a specific survey. The information system of most enterprises in the sample could not provide accurate information on the following variables:

1. Highest completed level of education
2. Number of weeks to which the gross annual earnings relate
3. Annual payments in kind (optional variable which must be included in the gross annual earnings in the reference year)

The main source of these problems was that some enterprises did not keep proper records of their employees, especially with regard to their education level and annual payments in kind. This problem was more common in economic activities such as the construction, or industry sector, and mainly in small enterprises (under 10 employees). It was also quite problematic to obtain the information in large enterprises such as hotels where the records for the employees were stored in the central offices and (not at the actual sampled enterprise/local unit). This required a significant amount of additional efforts and time by our employees.

Another problem that was quite common was that if the employees had left the enterprise by the time the data were collected, some enterprises usually did not keep their records.

Such problems were dealt with, in the following ways:

• In the cases where the data were not available at the local unit, but it was possible to locate the information needed from other administrative sources, then the interviewers would collect the data available from the local units, and then complete the missing data from the administrative sources.
• In cases where the employees selected in the sample had left the enterprise by the time the data were collected, they were replaced by other employees in the same position (occupation). It was therefore possible to obtain information from the records of the newly-selected employees. In cases where the position of employees who had left the enterprise ceased to exist after the employees left, then the employees were completely removed from the sample.
• Concerning information not readily available from the information system of enterprises, such as the “Number of weeks to which the gross annual earnings relate” and the “Annual payments in kind”, a secondary document was prepared requesting auxiliary information (maternity leave taken, sick leave not paid, etc.) in order to estimate the main variables.
• In the cases where it was impossible to obtain data on the above mentioned variables, the enterprises were asked to provide representative estimates.

Interviewer Errors

Interviewers were hired and trained to collect data specifically for the Structure of Earnings Survey. As was expected, at the beginning of the survey, some of the interviewers had not fully understood some of the concepts of the survey and how to locate the requested data from payrolls, accounts and other sources of information. With the help of the controlling officers who were more experienced in similar types of surveys, the questions and problems encountered were solved.

Unit response rate

The number of enterprises/establishments initially selected in the sample covering NACE sections B-S and enterprises with 1 or more employees was 1.481. Out of the 1.481 units, 76 were out of scope (misclassified), 96 units were dead or inactive and 1 unit was a duplicate. Thus, the final sample for the SES 2010 was 1.308 units (in-scope respondents). Data were fully collected for 1.153 units.

Thus, if unit response rate is defined as the percentage of the number of responses to the total number of in-scope respondents, then:

Unit Response Rate for the SES 2010:

1.153 units out of the 1.308 in the sample = 88,15%.

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Data entry

Processing errors due to data entry were limited, and were mainly identified through validation and consistency rules applied after the stage of data entry, using specialised software.

Coding

The coding of the questionnaires was performed by employees who were specifically trained for this purpose. Their work was also checked by controlling officers, as well as the validation and consistency rules applied to the data file.

Editing

Editing of the data was either done prior to the data entry (first checks of the questionnaire) or after the first run of the validation and consistency rules. In each case, the edited data were checked/ rechecked by the first/second run of the validation and consistency checks.

Item imputation rate

For the 1.153 respondents of the Structure of Earnings Survey 2010, data for all the compulsory variables were collected as well as the optional variables that were included in the questionnaire. Even in cases where it was difficult for the enterprises to locate the information requested (for optional or secondary variables), realistic estimates were provided, or the data were collected using administrative sources. Therefore, no imputation methods were used.

No imputation methods were employed in the SES 2010. However, grossing-up factors were adjusted in order to correct for unit non-response. The level of unit non-response was quite low, 11,85%. Therefore, it could be safely assumed that the adjustment in the grossing-up factors did not significantly affect the estimates of the survey variables.

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Timeliness and punctuality refer mainly to pre-established and actual reference periods of data and publication dates.

Micro-data sent to Eurostat

The micro-data were sent to Eurostat in the requested format, as soon as the plausibility and quality checks on the data were completed, on the 1st of August, 2012.

Dissemination of results

The Structure of Earnings Survey 2010 in Cyprus covered sectors B – S of the NACE Rev. 2 classification system (including sector O), and enterprises/establishments with 1 or more employees.

Detailed results of the survey are expected to be published by September 2013.

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Timeliness and punctuality refer mainly to pre-established and actual reference periods of data and publication dates.

1. The data collection phase

Compiling the questionnaire

The designing of the questionnaire started towards the end of 2010 and it was finalised completed in May 2011.

Methodological and explanatory notes for the questionnaire

Methodological and explanatory notes for the questionnaire were prepared as soon as the questionnaire was finalised, in the summer of 2011.

Drawing the sample

It was decided to use the same sample of enterprises as the Wages and Salaries Survey 2010, in order to be able to use some of the data collected under this survey, in the SES 2010. Thus, the sample of enterprises was drawn in September 2010. The second stage of the sampling procedure (sampling of the employees for each enterprise) was completed in September 2011.

Data collection process

The data collection began in September 2011 and was completed in the beginning of spring 2012 (end of February - March).

2. The post-collection phase

Checking of the questionnaires by the controlling officers, and coding

This phase was conducted simultaneously with the data collection phase, and was completed by the end of May, 2012. Although this phase was planned to finish earlier, due to austerity measures and budget cuts, we had to lay off our temporary staff working on the coding for a little more than a month. This of course caused a delay in the whole process of completing the survey.

Keying the data into the computer system

The data of the survey were keyed into the computer system simultaneously with the data collection. As soon as a batch of questionnaires was checked by the controlling officers, it was sent to the IT Department of the Statistical Service to be keyed into the system. The process of entering the data into the computer system was completed by the end of May, 2012.

Plausibility checks

A software programme was developed in order to perform plausibility checks on the data of the survey, after they were entered into the computer system. The procedure for developing this programme was initiated in January 2012. The plausibility checks were performed simultaneously with the data collection and the data keying phase (as soon as the software programme was developed). Plausibility checks were run on the data files starting from April 2012 and being completed by the end of July, 2012.

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The statistical units, economic activities to be covered and the definitions of the variables for the Structure of Earnings Survey 2010 (SES 2010) were based on the Council Regulation No. 530/1999 and the Commission Regulation No. 1738/2005, and were as follows:

Economic Activities covered:

For the SES 2010, NACE Rev.2 B - S activities were covered.

Statistical Units:

Data were collected from enterprises since the NUTS 1 level refers to the whole of Cyprus. The population of employees targeted for the SES 2010, were those who actually received remuneration during the reference month (October 2010).

Categories of workers included in the survey:

• Employees having a direct employment contract with the enterprise and which received remuneration, irrespective of the type of work performed, the number of hours worked (full-time or part-time) and the duration of the contract (fixed or indefinite).
• Apprentices and trainees with an employment contract with the reporting unit.
• Seasonal and occasional workers who were working pre-defined hours on a contractual basis.
• Interim or temporary workers employed by/through agencies – providing that the reporting unit was the agency actually employing them.
• Outworkers, but only if they were remunerated on the basis of the amount of hours worked.
• Employees on maternity leave as long as they received remuneration from the employer.

Size Groups of the enterprises:

Size groups were defined according to the regulation, including the size of 1–9 employees.

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The definitions of variables for the SES 2010 were according to the requirements of the Regulation. The coverage of the survey for 2010 was the same as that of year 2006. However, the change in the classification system for economic activities and occupations from NACE Rev.11 to NACE Rev. 2 and from ISCO-88 Com to ISCO-08 respectively, creates some problems in the comparability between the 2 surveys. Furthermore, the coverage of the survey was extended in comparison with that of 2002. More specifically, the 2010 survey covers all NACE sections requested by the regulation (compulsory and non-compulsory), including Public Administration and enterprises of all sizes, including 1 or more employees. The survey of 2002, covered enterprises with 2 or more employees and did not cover the non-compulsory sections of NACE.

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Coherence refers to comparability of data from different domains and sources. The aim is to inform the users of data about the conceptual differences that exist between several sources of variables that are very similar and to provide information on how to move from one concept to the other. Another objective is to check that statistics, which are in principle coherent conceptually, give comparable results for the same year and reference population.

1. Coherence with the “Wages and Salaries”, per employee, of the NA

In the case of the Structure of Earnings Survey 2010, statistics sent to Eurostat should be compared with the variable “Wages and Salaries”, per employee, of the National Accounts (NA).

Differences between the SES and the NA

Before comparing the earnings variables between the two sources and drawing any conclusions, one should take into account the following:

• The source for the Gross Annual Earnings from the SES2010, is the survey, which is enterprise based. The Wages and Salaries variable from the NA, is obtained using a number of different sources, i.e. a number of surveys and administrative sources.
• In some of the groupings constructed, there is only a small number of persons, especially for part-timers. Thus, the distribution of employees among the various groups might also involve wide margins of statistical errors.
• Concerning the government sector, Wages and Salaries from the NA, include funds related to pensions payable to retired employees. This is in accordance with their methodology but it is not the case for the SES 2010, which only includes annual wages, salaries and other regular or irregular bonuses paid to employees who received remuneration in October 2010.
• The classification of economic activities in the SES 2010, was decided at the enterprise level (except for the government where it was based on the activities of the different ministries and departments), while the NA classify economic activities based on the kind of activity unit (KAU) method.
• The “Wages and Salaries” variable from the NA refers to the total wages and salaries of employees for the year. In order to convert it to wages and salaries per employee to compare with the variable from the SES 2010, the figures provided by the NA were divided by the corresponding employment, which was obtained from a different source. This, of course, may create wider margins for errors when comparing the two sources.

The table that follows presents the Gross Annual Earnings per employee from the SES 2010 and the Wages and Salaries per employee from the NA, for the year 2010.

Comparison of Gross Annual Earnings per Employee from the SES 2010 and Annual Wages and Salaries per Employee from the National Accounts

2. Conclusions on coherence

Overall, for NACE sections B – S of the economy, the difference in the annual earnings per employee between the two sources is about 8%. Therefore, taking into account all factors stated in section 1 above, concerning the differences between the two sources, one might safely conclude that the data from the two sources are coherent.

Looking at the NACE breakdowns, there are some cases where considerable differences are observed. These differences can be explained by the different method of classifying the economic activities. As mentioned in section 1 above, the NA use the economic activity of each unit, while the SES 2010 uses the economic activity of the whole enterprise. Additionally, concerning the government sector, for the NA variable, pensions are also included in the figures. This amount is significant and affects the average of the sections where government is included (Public Administration, Health and Education sections).

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The Statistical Service of Cyprus plans to release a report containing a brief analysis of the main results of the survey and detailed tables, concerning all the main and optional variables covered. It is expected that the report will be released by September, 2013.

The report will be available in both the English and the Greek language, on printed and electronic versions. The printed version of the report will be available from both the Statistical Service of Cyprus and the Government Printing Office of the Republic of Cyprus. The electronic version of the report will be available only from the offices of the Statistical Service of Cyprus. Furthermore, the Statistical Service of Cyprus also plans to publish the results of the SES 2010 on its official website, http://www.cystat.gov.cy, under the theme of labour statistics (in the publications section).

Even though the results will be published on the internet, the Statistical Service of Cyprus will notify governmental and semi-governmental departments that are interested in the issues covered by the survey, for the publication of these results. Such departments are: the Ministry of Finance, the Ministry of Labour and Social Insurance, the Planning Bureau, the Human Resource Development Authority, etc.

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No other dissemination format.

The attached document provides information on the methodology relating to the Structure of Earnings Survey 2010 (SES 2010).

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