TurkStat, Turkish Statistical Institute

Labour Statistics Department

Devlet Mah. Necatibey Cad. No:114 06420 Çankaya/ANKARA

Turkish Statistical Institute has started to release its quarterly Labour Cost Index figures in 7 October 2010 to the national users for the period between first quarter of 2007 and second quarter of 2010 with the base year of 2008. The index has been structured to provide information in accordance with the Regulation No. 450/2003 of the European Parliament and of the Council of 27 February 2006 concerning labour cost index and following implementing Commission Regulations.

With the beginning of first quarter of 2018, Labour Cost Index figures are started to be calculated and published based on administrative data sources of Social Security Institute (SGK) and Tax Revenue Administration (GIB). Based on limitations of administrative data sources, the new series are calculated from first quarter of 2009 and disseminated to Eurostat with the base year 2016.

This report describes the quality of the LCI. The report will follow the contents of the Commission Regulation No. 1216/2003 concerning the labour cost index. The content of the Quality Report is; relevance, accuracy, timeliness and punctuality, accessibility and clarity, comparability, coherence and completeness.

Index numbers and growth rates are available for the overall and other indices by economic activity (NACE Rev.2)

NACE Rev. 2 Sections B to N

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). LCI data are presented in the form of index numbers (current reference year: 2016) 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)".

Enterprise.

All enterprises with one and more employees are covered.

Whole country (Turkey) is covered.

Data are available from the first quarter 2009.

The labour cost indices are currently use the year 2016 as reference year.

Administrative data are taken from Social Security Institute (SGK) and Tax Revenue Administration (GIB) mainly. For finance sector data are taken from Banking Regulation and Supervision Agency (BDDK). Hours worked data are taken from Labour Force Survey (LFS).

Administrative data are transferred monthly from Social Security Institute and Tax Revenue Administration, quarterly from Banking Regulation and Supervision Agency. Hours worked data are transferred quarterly.

Administrative registers.

Internal consistency checks are carried out at the analysis stage. Hours worked data are imputed.

Administrative registers are used.

not available

Quality checks are performed for the administrative data from Social Security Institute, Tax Revenue Adminsitration and Banking Regulation and Supervision Agency. Imputations are made for wages and salaries figures of both data resources and for hours worked data based on LFS. 

Quality is an important topic for the Turkish Statistical Institute. Turkish Statistical Law (2005) guarantees our professional independence.

Control of compliance with quality standards in the production of official statistics is done by Data Quality Control Board.

The main users are Eurostat and internal employer’s association. Apart from these users, the internal users of LCI are private enterprises, media, researchers, trade unions and Ministry of Treasury and Finance which analyze trends in the labour costs especially in the wage costs and monitoring of inflation pressures on the labour costs.

Time series of the labour cost indices by NACE section have been published from the 1^st quarter of 2007 on the TurkStat homepage. No survey has been carried out about the satisfaction of user needs. Any response from the users on the relevance has been delivered yet.

Turkish Labour Cost Index was scheduled to provide information in accordance with the Regulation (EC) No 450/2003. The index figures are available beginning from 2009 and onwards. 

All sections of NACE Rev.2 between B-N. Section P to S are not covered.

The data series of LCIs are calculated and provided in accordance with the Regulation No. 450/2003 of the European Parliament and of the Council of 27 February 2006, by NACE Rev. 2 sections and aggregates for all components of the index shown below:

• total labour cost (LCI_TOT),
• wages and salaries (TOT_WAG),
• other labour costs (TOT_OTH)

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

i) non-adjusted,

ii) working-day adjusted,

iii) seasonally and working-day adjusted

Administrative data are taken from Social Security Institute (SGK) and Tax Revenue Administration (GIB) mainly. For finance sector data are taken from Banking Regulation and Supervision Agency (BDDK). Hours worked data are taken from Labour Force Survey (LFS). Social Security Institute data are available on individual basis.

Not applicable

Not applicable

See below

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

See below

Minor imputation are made every quarter. Imputation rate is below 1%. 

Not available.

Seasonal and calendar related effects prevent observing the general tendency of data because of their temporary characteristics. Therefore, identification of seasonal patterns of short term indicators plays crucial role in order to make reliable comparisons between consecutive periods 

Method Used

Currently,  Turkstat  carries out the seasonal adjustment of Hourly Labour Cost Indices, using TRAMO-SEATS methodology based on ARIMA (Autoregressive Integrated Moving Average) model estimation developed by the Banco de Espana and also suggested by Eurostat. The software used for the application of this method  is TRAMO-SEATS for Windows (TSW).

Seasonal Adjustment Process

The process of seasonal and calendar adjustment of Labour Cost indices begins at the end of each year with determination of the specification of models of the next year.  This specified model structure is kept fixed throughout the year to adjust seasonally and/or calendar effects. At the end of the year, just like the previous year, specification of econometric estimation models for the following year is determined. The identified process repeats itself in a cyclical manner each year.

Hourly labour costs, earnings and labour cost excluding earnings indices and all sections of NACE Rev.2 classification between B-N have been seasonally and calendar adjusted. 16 subtitles of Labor Cost Indices contain both seasonal and calendar effects. 

Direct or Indirect Approach

Seasonally and calendar adjusted figures of Labor Cost Indices have been produced by using indirect approach 

Seasonal adjustment procedure is subject to revisions over time because of the re-estimation of seasonal component as new observations are added. These revisions  are implemented on the data of the last three years excluding the current year.

Publication

Adjusted data has been  published in 3 different ways.

•  “Calendar adjusted” data is derived from unadjusted data by removing calendar and holiday originated effects. Calendar adjusted data should be used in comparisons regarding the same month/period of the previous year.
•   “Seasonally adjusted” data is derived from unadjusted data by removing effects originating from seasonal effects. Seasonally adjusted data should be used in comparisons regarding the previous month/period.
•  If unadjusted data contains both calendar and holiday, and seasonal effects, “seasonally and calendar adjusted” data is derived by removing these effects. Seasonally and calendar adjusted data should be used in comparisons regarding the previous month/period

Revisions implemented on the data of the last three years excluding the current year for calendar and seasonally adjusted data. Revisions implemented on the previous quarter in the current quarter and for each quarter of the current year in the last quarter of the year for unadjusted data.

Revision is made also due to the updating of the base year and changes in statistical methods, concepts, definitions and classifications.

Revision of annual changes of unadjusted series of B to N is shown below.

See 6.6

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.

70 days

70 days

 Table: Punctuality in the delivery of LCI

The LCI data has been transmitted to Eurostat within the agreed time frame.

Not applicable.

Not applicable.

The data are considered highly comparable over time. 

Data are comparable back to 2009 for the sectors between B to N.

Not applicable.

Not applicable.

It is unfortunately not possible to compare the annual growth rates of the total labour cost index and of the ESA 2010 compensation of employees per hours worked at this time because National Accounts data by income approach is not available for the period beginning from 2006.

Internal consistency is ensured through validation checks performed before data publication.

Index data beginning from the first period of 2009 and metadata are available on the homepage of TurkStat http://www.tuik.gov.tr in Turkish and http://www.turkstat.gov.tr in English. 

A bulletin is being released every quarter - https://data.tuik.gov.tr/Kategori/GetKategori?p=Istihdam,-Issizlik-ve-Ucret-108

The LCI has not been disseminated as publication

The LCI data are released in the online database of TurkStat - https://biruni.tuik.gov.tr/medas/?kn=144&locale=en

Labour Cost Indices

There is no microdata access for the LCI

Customised information must be requested in the Information Area, clearly indicating the details of the contact person (name, postal address, telephone, fax and e-mail, if you have one), and detailing as much as possible the information that you require.

Requests will pass through a viability analysis process, programming and subsequent verification that the data obtained safeguard statistical secrecy and are representative.

Further information on definitions and methods are available at the dedicated section of Turkstat’s website.

The statistics are prepared in accordance with EU guidelines in order to meet the Code of Practice implemented by Eurostat, following the quality criteria on relevance, accuracy, timeliness and punctuality, accessibility and clarity, comparability, consistency, and completeness (along this report).

%100

Information on definitions and methodology can be found at TURKSTAT's website, users may consult them at will.

No additional burden on the respondents are generated because of using administrative data.

According to regulation on statistical confidentiality

 Under the terms of the regulation;

• Data may be collected only for statistical purposes and confidentiality is assured.
• The confidentiality of individual responses is guaranteed.

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

In the "Quality report on SA of LCI" file in 6.4, the models indicated are the most used models for the groups under each section due to the fact that the adjustment modelling procedure begins in groups level of NACE and then aggregated.