1. European system of Labour Costs
Hello. My name is Maria Boye and I work at Statistics Denmark. In the last year I have been to Ukraine 3 times to introduce my colleagues in Statistics Ukraine to the Labour cost and earnings statistics in the European Union. Today I would like to give you a short introduction to the European system of Labour Cost.

2. European Union European union; council, Parliament and Commission
Eurostat is one of forty General Directorates in the Commission
If I start with the European union, then the European union consist of the European Council, the parliament and the Commission.
Eurostat which is the European statistical office, is one of forty General directorates in the commission
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3. Eurostat
Mission: to be the leading provider of high quality statistics on Europe
Its task is to provide the European Union with statistics at European level that enable comparisons between countries and regions
Eurostat's mission is to be the leading provider of high quality statistics in Europe. Its task is to provide the European Union with statistics at European level that enable comparisons between countries and regions. This is a key task.
On one hand, decision-makers at EU level, in Member States, in local government and in business need statistics to make decisions. On the other hand, the public and media need statistics for an accurate picture of contemporary society and to evaluate the performance of politicians and others. Of course, national statistics are still important for national purposes in Member States whereas EU statistics are essential for decisions and evaluation at European level.
An interesting point for Ukraine might be to see how is Ukraine is performing compared to EU Member States? In Denmark we focus a lot on comparing Denmark with our neighboring countries and countries which we have a lot of trade with.
International statistics are a way of getting to know countries and compare them. They are an important, objective and down-to-earth way of measuring how we all live.
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4. Eurostat
Established in 1953 to meet the requirements of the Coal and Steel Community
Became a Directorate-General (DG) of the European Commission in 1958
Key role: to supply statistics to other DGs, the Commission and other European Institutions
The result: Eurostat offers a whole range of data that governments, businesses, journalists and the public can use
Eurostat was established in 1953 to meet the requirements of the Coal and Steel Community.
When the European Community was founded in 1958 it became a Directorate-General (DG) of the European Commission Eurostat’s key role is to supply statistics to other DGs and supply the Commission and other European Institutions with data so they can define, implement and analyze Community policies. The result is that today Eurostat offers a whole range of important and interesting data that governments, businesses, journalists and the public can use for their work and daily life.
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5. Data stems from the Member States Consolidate the data
Eurostat
Does not collect data
Data stems from the Member States
Consolidate the data
Ensure they are comparable
As I mentioned earlier. Eurostat’s main role is to process and publish comparable statistical information at European level. Eurostat try to arrive at a common statistical ‘language’ that embraces concepts, methods, structures and technical standards. Eurostat does not collect data. This is done in Member States by their statistical authorities. The member states verify and analyze national data and send them to Eurostat.
Eurostat’s role is to consolidate the data and ensure they are comparable, using harmonized methodology.
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6. Eurostat Eurostat is divided in 7 Directorates
Directorate F is about ”Social Statistics”
One of 5 sections under Social Statistics is ”Labour Market”
Each section has its own so-called Working group. LAbour MArket Statistics (LAMAS)
Eurostat is divided into 7 directorates.
Directorate F is about ”Social Statistics” and has 5 sections where ”Labour Market” is one of them.
Each section has its on so-called working group. For the Labour Market Statistics it is called LAMAS. I will get back to the working group later.
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7. Statistics in Labour market
Labour Cost Survey (LCS)
Structure of Earnings Survey (SES)
Labour Cost index
Gender Pay Gap
Labour Force Survey
Labour Market Policy
Job Vacancies
In the section Labour Market the focus is the following statistics:
Labour Cost Survey (LCS) which is 4-yearly survey
Structure of Earnings Survey (SES) which is 4- yearly survey
Labour Cost index which is quarterly survey
Gender Pay Gap which is a yearly update
Labour Force Survey is a quarterly survey
Labour Market Policy is a yearly survey
Job Vacancies is a quarterly survey
The focus we have had here in Ukraine is on the Labour Cost Survey, the structure of earnings survey and the labour cost index
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8. The statistics - legislation
Council regulation: frame of the survey
Commission regulation: how to implement the survey
Gentlemen’s agreement
For all the statistics there are European legislation. There are two types of legislation:
Council regulation which gives the frame of the survey. Like the reference year, the interval between surveys, scope, charateristics of the required information, when the data should be sent to Eurostat.
And then there is the commission regulation which is more specific and has information about implementing the survey, coverage, variables and so fort
There are also some gentlemen’s agreement that is not legislation, but if you fulfill it you are a gentlemen. The gentlemen agreements are for example yearly updates for the Labour cost survey and the structure of earnings survey which are 4-yearly surveys. They are not as detailed as the 4-yearly surveys and the agreement do not give specifics on which source to use. So you can use whatever source that you have available in your country.
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9. LAMAS working group Participants: Eurostat All member states
Candidate countries
Potential candidate countries
European central bank
DG employment
Business Europe, ILO, OECD
Getting back to the LAMAS working group. The working group is where the legislation, the results and changes to legislation is discussed. Also the working group makes task forces that is set up to address specific issues. The latest is about reducing the Structure of earnings survey, so that the burden for the companies can decrease. One of their suggestions was to use administrative sources if they were available.
The participants in the LAMAS working group are
Eurostat
All member states
Candidate countries
Potential candidate countries
European central bank,
DG employment
Business Europe which is a organization for employers, ILO, OECD
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10. LAMAS working group
Discussions in LAMAS takes in some way its starting point the regulations
One of the most important statistics is the LCI
Sources for the statistics are also discussed
The discussion in the working group in some way takes its start at the regulations.
The most important statistics is the Labour Cost index and that is why the central bank is there. There are a lot of eyes following this statistics.
The sources for the statistics are also discussed and the member states tries to share the experience using different sources
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11. Possible sources Tailored questionnaires Existing surveys
Administrative sources
Combination of sources
If we look at the possible sources for the Labour cost survey, structure of earnings survey and the labour cost index then there are
Tailored questionnaires for the specific survey
Using existing national surveys
Using administrative sources
Or a combination of the above.
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12. Tailored questionnaires
Questionnaire designed for the specific survey
With a tailored questionnaire it is a questionnaire that is designed for the specific survey. In the beginning, this approach was use by many countries.
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13. National yearly surveys National quarterly surveys
Existing survey
National yearly surveys
National quarterly surveys
National monthly surveys
When we talk about using existing survey, it is using surveys that are already in a country. For example in many of the Nordic countries we have had national Labour cost surveys and structure of earnings survey yearly for many year. So we base the 4-yearly survey the national yearly survey.
More and more countries now have national survesy as the source.
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14. Administrative sources
Other databases which collect the information
E.g.. The earnings and working hours database of the national office for social security (Belgium)
IT pay systems
But even if you have a national survey we see that a lot of the information comes from administrative sources. This could be other organizations that collet the information for other reasons. I have listed that in Belgium they use a database from the social security system. In Denmark we primarily work together with the IT-system that sell software that can handle the pay-roll. And how we do it I will get back to later. Using the pay-roll system is becoming more and more used in Europe.
In Denmark we also uses information collected from other administrative sources. Some labour cost is paid to a specific government company. From this company Statistics Denmark gets information about payments for companies in our sample. This is to reduce the response burden for the companies, because otherwise we would ask them for the information in a questionnaire.
The focus in Eurostat for the last couple of year have been on reducing the burden for the companies and Eurostat believes that the more information that we can get from reliable administrative sources the better.
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15. Using administrative source when possible Using national surveys
Combinations
Using administrative source when possible
Using national surveys
Tailored questionnaire for the rest
The combination of sources is what most countries do today. Countries use administrative data when available then national survey and if some is not covered they used a tailored questionnaire for the rest.
If Ukraine would start producing a Labour Cost Survey, a Structure of Earnings Survey or a Labour cost index I believe that you will be able to make statistics that are comparable to EU statistics. Statistics Ukraine already have national surveys that combined with administrative sources will make it comparable. If Statistics Ukraine can’t get the information from the administrative sources, then Statistics Ukraine might have to add questions to the current surveys and that means increase the burden for the companies. And that is not a solution that many will find acceptable.
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16. The Danish Structure of Earnings Survey
Yearly survey
Coverage:
All public companies
All private companies with more than 9 employees
Collecting:
All employees in the company on individual level.
As an example of how administrative data can be used, I would like to explain how we in Denmark collect information for the national structure of earnings survey, that is a yearly survey.
The survey is collected at the level of each employee, so the burden for the companies to participate in this survey is very high.
As I just said then the Danish Structure of earnings survey is a yearly survey.
All public companies are in the survey as well as all private companies with more than 9 employees.
All of these companies have to give information on employee level about annual earnings, annual payments for overtime, annual payments for shiftwork and so on.
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17. The Danish Structure of Earnings Survey
How do we collect the information?
IT pay-roll system
99 % of all private companies
100 % of all public companies
Online questionnaire
1% of all private companies
Now how do we collect the needed information in Denmark
There are two ways of sending the data to Statistics Denmark
You can use you IT pay-roll system or you can use an online questionnaire.
99% of the private companies uses their IT pay-roll system and all of the public companies uses their pay-roll system
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18. The Danish Structure of Earnings survey
IT pay-roll system
Monthly payments are split into relevant requested information
Companies job:
Keep statistical information up to date
Well you might wonder how we get the information from the IT systems. 20 years ago Statistics Denmark contacted the biggest IT systems that offered pay-roll systems in Denmark. Together we worked on a format so that as long as the companies used the pay-roll systems then the pay-roll system would be able to deliver the data for the full year for each employees. They take every small payments that can be identified on the paycheck and add it to the correct variable that we request.
The only thing that the companies need to do is to have updated statistical information on each employees. This is information like number of annual days of paid leave, type of employment contract, occupation, number of contractual hours for employees paid by the month and so fort.
The statistical information is not so burdensome to the companies to keep updated. It is only when new employees start or there are some changes to an employees contract.
This use of pay-roll information is called use of administrative sources as this is collected from the administrative sources in the companies without them having to do a lot of work
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19. The Danish Labour Cost Survey
Yearly survey
Coverage:
A sample of private companies with more than 9 employees
Collecting:
Information at company level.
Also we use administrative sources for the Danish Labour cost survey.
The survey is company level and most of the information requested can be found in the companies financial report but for many companies they find this troublesome.
As I just said then the Danish Labour cost survey is a yearly survey.
In the survey are a sample of private companies with more than 9 employees and we request the information at company level
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20. The Danish Labour Cost Survey
Danish Structure of earnings survey
National pension fund
Tailored questionnaire
So how do we collect data. Well we use all the information that we can find in the Danish structure of earnings survey where we can find information about earnings.
Then last year we started cooperating with the Danish National Pension fund, where companies have to make some small payments to at company level. This is for the Labour Market Occupational Diseases Fund, The employers reimbursement system for trainees and a maternity fund. Payments to these funds are statutory.
Previously we have asked the companies for the information but from last year we started asking the national pension fund for the information.
For this reason we could decrease the number of questions on the questionnaire and the burden for the companies.
This was a lot of information about the European system for earnings and labour costs and a short explanation of the source that is used right now and how we do it in Denmark. Do you have any questions?
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