methodologies: ilo’s recommendations on an integgy grated ... · – blue collar and white collar...

Methodologies: ILO’s recommendations on an integrated system of wages and related statistics g y g

Monica D. CastilloChief Decent Work Data Production UnitChief, Decent Work Data Production UnitILO Department of Statistics – Geneva

[email protected]

National Labour Market Information Training Programme Port of Spain, Trinidad and Tobago

31 October – 11 November 2011

Department of Statistics

Contents• Establishing a statistical programme on sources of information on

wages and employment-related income statistics: An integrated wages and employment related income statistics: An integrated approach

• Establishment based surveys: (wages statistics)• Establishment-based surveys: (wages statistics)– Current statistics– Structural (non-current) statistics

• Household surveys: Labour force surveys (employment-related income statistics)income statistics)

• Administrative records

International Labour OfficeDepartment of Statistics

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Establishing a statistical programme of wages and related statisticsof wages and related statistics

• Major goals to be achieved in establishing a programme for the collection/compilation of basic wages and related statistics:collection/compilation of basic wages and related statistics:– Should be as comprehensive as possible, i.e. cover all major

areas of wages & related statistics– Should be done so that resulting data is mutually consistent &

reveal inter-relationshipsSh ld t t b th t ( h t t ) d d l t – Should target both current (short-term) needs and long-term needs

– Should cover all branches of economic activity, geographical Should cover all branches of economic activity, geographical regions, whole employee population (wages) and also self-employed persons (employment-related income)


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Integrated sources of information on wages statistics and income from employment

th th12th ICLS (1973) and 16th ICLS (1998)Current statistics Structural (non-current)

Statisticss

Current establishmentsurvey on: Survey on the structure

and distribution of earnings

(monthly or quarterly) Statistics(annually, or 3 to 5 years)

Serves as benchmark

ased

surv

eys

nd su

rvey

s

y-earnings and hours

worked (or hours paid for);-wage rates and

normal hours of work

and distribution of earnings

Survey on labour costblish

men

t-ba

cens

uses

an

normal hours of work Survey on labour cost

Agricultural surveysCurrent labour cost is estimated with administrative information

Esta

b

Indu

strial

Household based Surveys(agricultural earnings, Administrative records


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(agricultural earnings,income from employment)

Establishment based surveysy• Source of information

P ll– Payroll– Other establishments’ registers: attendance, social security and tax

payments• Units of observation• Coverage• Data available and outputs• Data available and outputs• Sample design• Data collection reference periodsp• Advantages and Limitations• Data collection practices


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Observation units• The enterprise• The establishment• The establishment• The kind of activity unit• Groups of workers

– Men and women– Blue collar and white collar workers (wage earners, salaried

employees)employees)– Permanent and casual workers

• Groups of occupations– Specific within industries

• Individual workers (allows the greatest flexibility in outputs)All or a subsample of workers– All or a subsample of workers


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Enterprisesp

• Institutional unit in its capacity as a producer of goods and services; an enterprise may be a corporation, a quasi- corporation, a non-profit institution, or an unincorporated enterprise.

International Labour OfficeBureau of Statistics

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Establishments

• An enterprise, or part of an enterprise, which engages in productive activity at or from one location

• It is the preferred unit for sampling– But not always feasible if the enterprise does not y p

maintain separate records

International Labour OfficeBureau of Statistics

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Kind of activity unitsy

• An enterprise, or a part of an enterprise, which engages in only one kind of (non-ancillary) productive activity or in which the principal productive activity accounts for most of the value added.


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Coverageg• Of industries

– May exclude agriculture, education, health and public administration and y g , , pdefence

• Of institutional units– May only include corporations/government

The objective is to cover all sectors that are important in the The objective is to cover all sectors that are important in the y y g

• Of establishments– Establishments above x number

of workers

sectors that are important in the country in terms of - employment- capital intensive production

ti i d t i

sectors that are important in the country in terms of - employment- capital intensive production

ti i d t i• Of workers within industries– Only adult/permanent– Excluding managers and supervisors

- exporting industries- special needs (women dominated, vocational training related, etc.)

- exporting industries- special needs (women dominated, vocational training related, etc.)Excluding managers and supervisors

– Excluding apprentices, part-time workers• Of geographical areas

– Urban areas only

, ), )

Urban areas only


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Data available and outputsData available and outputs• Data available

– Components of wages: basic wages bonuses allowances social security Components of wages: basic wages, bonuses, allowances, social security payments

– Contractual hours, overtime hours paid, absence from work (paid and unpaid)Number of jobs held by persons on the payroll– Number of jobs held by persons on the payroll

• Jobs held by paid employees --- regular, without long absences• Jobs held by non paid employees --- working proprietors and family

b members – Information about establishments– Information about workers

• Outputs


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Information about establishments• Industry or industrial group• Institutional sector (corporation, cooperative, government,

non-profit institution)R i• Region

• Size of establishment• Wage payment systems (work schedules, shift operations,

incentive bonuses, holidays and vacation practices, etc.)L b • Labour-management agreements coverage

• Turnover (hirings, firings)


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Information about workers• Type of worker

W / l i d l– Wage earner/salaried employee– Blue collar/white collar worker– Skilled/semi skilled/unskilledSkilled/semi skilled/unskilled– Piece rate worker– Adult/non-adult worker

• Sex, age group• Casual/permanent worker• Occupation• Education level

L th f i /W k i


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• Length of service/Work experience

Sample design of an establishment surveysurvey

• Sample units– Establishments (more common) orEstablishments (more common) or– Workers

• Sampling frame: there should be a unique sample frame for multiple • Sampling frame: there should be a unique sample frame for multiple establishment surveys

S li th d• Sampling method– List-based sampling– Area sampling for small establishments

• Coverage– As complete as possible


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– But usually depends on sample frame

Reference periods and job coveragep j g• Reference periods of data collection:

Depend on survey frequency (monthly quarterly or annually) – Depend on survey frequency (monthly, quarterly, or annually) and topic

• Job coverage may be any of the following:– All jobs in the payroll anytime during the month, quarter or year

independently of the number of days worked during the given independently of the number of days worked during the given reference period• Will include jobs that started or ended in the course of the month, quarter

or year– All jobs in the payroll during the whole month, quarter or year

(i.e., employed every day of the month, quarter or year)( p y y y q y )– An average number of jobs during the month, quarter or year


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Outputsp• Earnings per hour worked or paid (by components)

W t l h f k• Wage rates per normal hour of work• Labour cost per hour worked (by components)• Number of jobsNumber of jobs• Average hours worked or hours paid for• Distribution of earnings (median earnings)g ( g )• Gender pay gap• Wage indices

– Simple indices of growth for particular industry, occupation– Weighted, aggregative index


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Advantages of establishment surveysg y• Consistent information over time (as long as record keeping

d t h )does not change)• Information readily available from records

L b d h • Low response burden when – Information requested is easily obtained from registers

• Accounting software that incorporates statistical component is recommended (facilitates completing questionnaire)P i i i i h l ’ i d i bl• Prior negotiation with employers’ groups is desirable


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Limitations of establishment surveysy• Reduced coverage of establishments and workers

R t l t i l t t ti ti l t t d• Responses may not relate precisely to statistical measures targeted– Measures jobs, not employment– Measures hours paid for not hours actually workedMeasures hours paid for, not hours actually worked– Measures regular earnings, not total earnings

• Limited range of informationg– Characteristics of workers are often missing, especially

occupation• Lack of detailed information

– Data by wage components is usually missing


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Data collection• Interview approach

Di t i t i i ll f fi t t t– Direct interview – especially for first contact– Mail or internet – for follow up surveys– Telephone – for follow up clarification questionsTelephone for follow up clarification questions

• Tabulation and calculation of indicators– Employment, hours and wages by sex, industries and worker

groups– Hours per week, per day (overtime hours)– Wages per month, per hour (overtime pay)

Distribution of earnings– Distribution of earnings


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The questionnaireq

• Should take into account the type of information that establishments can provide (from payrolls or other registers)– Avoid requesting averages or distributions– Avoid requesting opinions or judgements, only facts

• Should reassure respondents of confidentiality• Should provide clear and complete instructions and Should provide clear and complete instructions and

definitions


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Three sections in a questionnaireq

1. Identification of establishment2. Main data – in tabular form3. Observation - to describe reasons for large variations in the figures 3. Observation to describe reasons for large variations in the figures

from one period to the next, or variations between their responses and the request of information


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Sections in a questionnairePart 1: Identification of establishmentPart 1: Identification of establishment

• ID number, name, address, telephone, etc.• Legal status (corporation, unincorporated

enterprise, cooperative))• Main activity, ancillary activities• Number of days that the establishment operated • Number of days that the establishment operated

during reference period, number of days not operated by reason (holidays strike etc )operated by reason (holidays, strike, etc.)

• Establishment practices and policies


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Establishment practices and policiesand policies

• Wage and salary payment practicesB i f t• Basis of wages payment

• Frequency of wage payment• Percentage of wages paid in kindPercentage of wages paid in kind• Payment of cost of living allowances• Overtime compensationp• Remuneration for time not worked• Contribution to social security schemes• Vocational training programmes in place• Welfare services provided


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Sections in a questionnairePart 2: Main dataPart 2: Main data

• Reference period clearly stated for each itemD t it• Data items:– Number of jobs– Working timeWorking time– Wages

• Separately for groups of workers (or individual workers)p y g p ( )– Men and women– Skilled/unskilled– Permanent/casual– Occupational groups

Et– Etc.


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Information about jobsj• Number of jobs held by workers on the payroll

– Temporary workers, apprentices, part time workers, etc.

I f ti b t j b t• Information about job turnover– New jobs created during the reference period– Jobs suppressed during the reference period– Vacant posts during the reference period, and

f h fprospects for the future• Information about method of payment (time rate, piece

t )rate)International Labour OfficeDepartment of Statistics

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Information about working timeg• Depending on local practices, establishments will be able to provide

T t l b f h t ll k d f ll j b– Total number of hours actually worked for all jobs– Total number of hours paid for– Number of days actually worked multiplied by the contractual Number of days actually worked multiplied by the contractual

hours per day• Total number of hours of overtime worked in these jobs

– Paid– Unpaid

• Total number of hours of absence in these jobs– Unpaid

Paid– Paid


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Information about wagesg• Gross earnings

– Basic wages• Social security benefits from

employerBasic wages– Allowances– Bonuses

• Overtime bonuses

employer• Employers’ social security

contributionsOth l b t– Payments in kind

– Family allowances• Deductions from earnings

• Other labour costs– Training– Taxes on employment

Oth– Pensions– Health, invalidity– Unemployment

– Other

The level of detail requested has to be – Tax deductions– Union fees– Other

The level of detail requested has to be carefully decided on the basis of data

needs and what employers can provide


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Data processingp g• Receipt and control of questionnaires

– Completeness– Non-response– Inconsistencies with previous surveys

• Coding (assigning a number (code) to survey responses)• Data entry and editing

– Invalid and out of range values– Internal inconsistencies

• Implementation of weighting & estimation proceduresp g g p


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Current statistics: Surveys of earnings and hours workedof earnings and hours worked

• Objective:To measure monthly or quarterly changes in the levels of average – To measure monthly or quarterly changes in the levels of average earnings and hours of work of wage earners and salaried employees in the economy

• Survey frequency– Monthly, or at a minimum quarterly

• Time reference period of data collection:• Time reference period of data collection:– May be a pay period of a calendar week, a fortnight, or monthly– But tabulations of time unit of earnings of wage earners might be per hour, per

d k h ( h f d f l i d l ) day, per week or per month (per month preferred for salaried employees) – Reference period should be the same for earnings and hours worked data

• Reporting unit: establishmentp g


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Surveys of earnings and hours worked: Information collectedworked: Information collected

• Earnings– Will tend to include only regular payments, i.e., will

exclude end of year bonuses and exclude payments in ki d (b t h ld t t il t t l i )kind (but survey should try to compile total earnings)

• Hours actually worked– Is not readily available (requires records on all overtime

and absence from work)– Hours paid for is used as a proxy (values are higher)

• Number of jobs (held by workers on the payroll)


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Current statistics: Surveys of wage rates and normal hours of workrates and normal hours of work

• Objective: to measure changes in the levels of average wage rates and normal hours j g g gof work of employees in the economy based on information from representative occupations

• Survey frequency:y q y– If purpose is to update wage indices, should be monthly or quarterly– Or annually covering main occupations in key industries

• Reference period of data collectionReference period of data collection– Usually fixed as a specified normal working period within the month or quarter

• Time unit – Wage rate time unit may be fixed per hour day week or monthWage rate time unit may be fixed per hour, day, week or month– Preferable for statistics of wage rate and normal hours time units to be identical, e.g. per day, week, or

month

• Reporting unit: establishment


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Surveys of wage rates and normal hours of work: Information collectedhours of work: Information collected

• Wage rates actually paid (i.e. in force or according to laws, regulations collective agreements or arbitral awards) regulations, collective agreements, or arbitral awards) – Time rates of wages (for time-rated wage earners)

Piece rates of wages (for piece workers)– Piece rates of wages (for piece workers)• Defined as payments for a unit of output• For statistics it is calculated as the payments during a • For statistics, it is calculated as the payments during a

reference period divided by the hours actually worked during that period

• Normal hours of work as established in contracts -> contractual hours

• Number of jobsInternational Labour OfficeDepartment of Statistics

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Structural (non-current): Wage structure and distribution surveysstructure and distribution surveys

Objectives: An in-depth inquiry which aims to reveal the main factors influencing the levels differentials distribution & trends of earnings influencing the levels, differentials, distribution & trends of earnings, wage rates and hours of work

• Survey frequency: every 3-5 years Also known as:wage censuses

• Reference period of data collection:– Ideally one year

wage censuses,occupational wage surveys,wage composition surveys

Benchmark for current statistics of – Or one pay period or one month (representative of the year)

Reporting unit: establishment

Benchmark for current statistics of earnings, working time and wage

rates

• Reporting unit: establishmentMost complex survey, very

detailed, time consuming and expensive


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Wage structure and distribution surveys: Information collectedsurveys: Information collected

• Wage rates and normal hours of workE i d h t ll k d id f• Earnings and hours actually worked or paid for

• By industry, geographic regions, occupations, sex, establishment sizeestablishment size

• Possibly by age, education level, vocational training• Most important outputs:p p

– Distribution of employees by wage rates, earnings & hours of work

– Earnings and wage rates by components and workers’ – Earnings and wage rates by components and workers characteristics

– Gender pay gap


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Structural non-current statistics: Labour cost surveysLabour cost surveys

• Objective: to provide information on the level, composition and evolution of the cost incurred by employers in the employment of evolution of the cost incurred by employers in the employment of labour

• Frequency: – Intervals not exceeding five years

• Reference period: – There can be wide variations in labour cost patterns between

different parts of the year. – Comprehensive labour cost surveys should aim at collecting data – Comprehensive labour cost surveys should aim at collecting data

relating to a full calendar year, or the usual accounting year• Reporting unit: The establishment


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Labour cost surveys:Information collectedInformation collected

• Information collectedLabour cost by components– Labour cost by components

– Number of employees (average during the year)– Hours actually worked– Hours paid for– Data should be collected separately for wage earners and salaried employees

• Most important outputsMost important outputs– Level of labour cost

• By componentP l d th h t ll k d• Per employee and per year, per month, per hour actually worked

• By industry, size of establishment, geographical location, sex• By unit of output (problematic)


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Industrial censuses and surveysy• Objectives

– To measure output of industry for study of structure, factors linked to industry growthp y y , y g– They also measure compensation of employees and estimate the share of wages in value

added– Basic sources for productivity measures

• Frequency– Censuses: very 5-10 years; sample surveys: annually

• Information collected

Basic source of data for production statistics

– Gross and net output, expenditure– Employment and compensation of employees

• Reporting unit– the establishment, sometimes the enterprise

• Limitations– Measuring compensation of employees is not the main objective of these instruments


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g p p y j– Usually no information on hours of work

Household surveys: Labour force surveysLabour force surveys

• Objectives:T ll t d t i ti it d diti f k f th – To collect data on economic activity and conditions of work of the population, including employment-related income

• Advantagesg– Full worker and establishment coverage– Information provided is close to statistical measure targeted

• Limitations– Response errors

• On income, hours and industry• Due to proxy response and sensitivity

Expensive


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– Expensive

Labour force surveys: Information collectedInformation collected

• Income from paid and self employmentB t– By components

• Income from non-employment sources• Hours actually worked hours usually worked normal hoursHours actually worked, hours usually worked, normal hours

– By components• Number of persons employed p p y• Information about workers

– Sex, age, occupation, education level, …• Information about establishments

– Industry, size, institutional sector, …


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Administrative records• Advantages

I i– Inexpensive– Consistent in time

• LimitationsLimitations– Limited worker coverage– Responses may not conform to statistical measure targetedp y g– Difficult to maintain up-to-date, affecting timeliness and reliability

• Types– Social security returns– Income tax returns

L l d t– Legal documents


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Data available and outputs of social security returnssecurity returns

• Social security returns: Forms filled by employers with information about employees covered by social security systemcovered by social security system

• Data available– Number of employees covered– Employees' characteristics: employment status, sex, age, degree of skills. Sometimes

occupation and duration of work in terms of hours, days or months, etc.– Employers' characteristics: industry, employment size, etc.

E l ' i (d fi iti ft diff f th t d i t ti ti – Employees' earnings (definition often differs from that used in wages statistics programmes)

– Employees and employers' contributions• Outputs:• Outputs:

– Average earnings per year or per month– Distribution of employees by level of earnings

C b h k d t f if i / dj ti i d t f t bli h t


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– Can serve as benchmark data for verifying/adjusting earnings data from establishment surveys

Data available and outputs of income tax returnstax returns

• Data availableCh t i ti f ll t i f k b – Characteristics of all categories of workers, by sex, age, occupation, employer / establishment

– Annual earnings of employeesg p y– Employees' contributions– Other sources of income: entrepreneurial income, property

income, etc.– Duration of work in terms of weeks or months

Outputs• Outputs– Average earnings per year or month– Distribution of employed population by levels of earnings / income


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Distribution of employed population by levels of earnings / income

Data available in legal documentsg

• Minimum or standard wage rates for a normal work week– Hourly or daily rates

• Wage rates specified in wage agreements– By type (time rates, piece rates) and components,y yp ( , p ) p ,– By occupation or trade, industry, level of skill, sex, adult

/ juvenile, etc.j• Normal hours of work (fixed by law, regulations and

practices)


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practices)

Conclusions• Data producers should clearly understand the purpose of wages and related

statistics (stakeholders’ needs)( )• In establishing a programme for the compilation of basic wages and related

statistics, should be comprehensive and consistent• Wages and related statistics programme should target both current (short-term) Wages and related statistics programme should target both current (short term)

needs and long-term needs, as defined by priorities and resources• Establishment survey is the main data collection instrument for wages statistics of

employees and offers the possibility of current survey statistics and structural employees, and offers the possibility of current survey statistics and structural statistics

• Labour force survey is the main data collection instrument for employment-related income statistics (includes self-employed workers)income statistics (includes self employed workers)

• To the extent possible, data should cover all branches of economic activity, geographical regions, whole employee population (wages) and also self-employed persons (employment-related income)persons (employment related income)


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References• Mata Greenwood, Adriana, 2010. Power Point presentation “Wages statistics: Sources”, ILO

Department of Statistics, Geneva.• International Labour Office, 1979. An Integrated System of Wages Statistics: A Manual on

Methods, Geneva• See also:

– Resolution concerning statistics of labour cost, adopted by the Eleventh International Conference of Labour Statisticians(October 1966); web link:

http://www.ilo.org/wcmsp5/groups/public/---dgreports/---stat/documents/normativeinstrument/wcms_087500.pdf

Resolution concerning an integrated system of wages statistics adopted by the Twelfth – Resolution concerning an integrated system of wages statistics, adopted by the Twelfth International Conference of Labour Statisticians (October 1973); web link:


– Resolution concerning the measurement of employment-related income, adopted by the g p y , p ySixteenth International Conference of Labour Statisticians (October 1998); web link:


– UN-System of National Accounts 2008 (definition of an enterprise, establishment); web link:htt // t t / d/ ti l t/d /SNA2008 dfhttp://unstats.un.org/unsd/nationalaccount/docs/SNA2008.pdf

Department of Statistics 45

Questions• What are the current statistical needs of data users in Trinidad and Tobago for

wages and related statistics?g• What are the resources available?• What are the existing statistical sources for wages and related statistics?

Establishment surveys?– Establishment surveys?– Economic census?– Household survey?– Administrative records?– Agricultural census/survey?

• Do data sources include instruments for short-term and long-term needs?g• Are the existing statistical sources meeting the needs of data users? Why?• What are the obstacles to achieving an integrated system of wages statistics?

Department of Statistics 46

methodologies: ilo’s recommendations on an integgy grated ... · – blue collar and white collar...

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