Labour costs, their structure and labour cost index

Survey method and data source

Data on monthly average and real wages and salaries are obtained by surveying enterprises, central government institutions, local governments and institutions thereof and institutional units.

Information is acquired by compiling questionnaires developed by the CSB – quarterly statistical reports on activities of merchants, institutions, foundations, associations and funds (2-Labour, 2-Labour-municipalities, 2-Labour (short)), and administrative data.

Statistical report form 2-Labour (short) is submitted by individual merchants, foundations, associations and funds employing 10 – 49 persons. Form 2-Labour-municipalities submitted by local governments and municipal institutions. All other statistical units included in the sample submit statistical report form 2-Labour.

Administrative data are acquired from reports on employees submitted by employers to the State Revenue Service information from the Report on state social security compulsory payments from employee income, Income Tax and Business Risk State Duty during the reference month, from the Report regarding the employment income, personal income tax and state mandatory social insurance contributions of the payers of the income tax for seasonal farm workers and from Micro-enterprise Tax Declaration.

All latest forms are published in the CSB website section Forms.

Information is compiled on all fields. Data by kinds of economic activity are compiled by the main kind of activity which includes also all the other activities of the respondent, except centralized accountancies of the local governments, which submit data separately on following sectors:

• Electricity, gas, steam and air conditioning supply;
• Public administration and defence; compulsory social security;
• Education;
• Residential care activities;
• Social work activities without accommodation;
• Creative, arts and entertainment activities;
• Libraries, archives, museums and other cultural activities;
• Cleaning activities.

Target population

Target population are all statistical units (state and local government budgetary institutions, state and local government merchants, private commercial companies, individual merchants, peasant and fishermen farms employing 50 persons and more, foundations, associations and funds employing 1 and more persons) economically active in 2020.Target population of the survey does not include:

• religious organisations;
• rural handicraft enterprises;
• family businesses;
• individuals performing economic activity.

Target population does not include also statistical units having NACE Rev. 2 classification economic activity code starting with 97 or 98.

Sample size

Each quarter of 2020 about 7 thsd respondents are surveyed.

Budgetary institutions, businesses with government or local government participation 50 % and more, and all businesses of the private sector with 50 employees and more are surveyed completely. Other statistical units are surveyed with the help of simple stratified random sample conduced in pre-built strata based on the main kind of economic activity and size of enterprise (number of employees). Sample, regardless of all other pre-conditions, includes general government sector enterprises (institutional sector classification code starts with S13).

When the population was built, the population frame included all statistical units meeting target population description. Population frame was built based on the information in Statistical Business and Organisation Register. Upon the sample formation, population frame consisted in total of 110 184  units, 2 956 units of which belonged to the first population part surveyed with a full-scope survey, 9 453 units to the second population part surveyed with a sample survey, and 97 775 units to the third population part not surveyed directly. Before forming the sample, the population frame was broken down into three target population groups. The surveyed sample size constituted 6 182 units.

*SVTK – CSB Typological Classifier of Statistical Units.

Calculation methods

Information is obtained from the statistical surveys every quarter. The information acquired form the respondents of the sample is summarized with the help of weights given for the each sample unit. Report indicators multiplied with weights first of all are added together at class (four-digit), group (three-digit), division (two-digit) and section (letter) level according to NACE Rev. 2. Information is compiled in breakdown by main kind of activity.

Labour cost indicators are given on employees having working time registration and wages and salaries whereof have been calculated.

With an aim to estimate imputations of non-responding and directly not surveyed statistical units and credibility of data acquired by using weights, data are analysed each quarter. Summary indicators are compared with previous periods and administrative data sources.

If compared to annual data quarterly data do not include vocational training costs and recruitment costs; expenditures for work clothes and uniforms as well as other costs not specified yet.

The labour costs index LCI (in percent) in the period t is calculated as follows, with the average hourly labour costs in 2016 = 100 taken as the basis:

LCI_t = LC_t : LC _{average in 2016} x 100, where

LC_t – hourly labour costs in the period t;

LC _{average in 2016} – hourly labour costs on average in 2016.

Hourly labour costs LC in the period t are calculated in the following way:

LC_t = TLC_t : TH_t, where

TLC_t – total labour costs in the period t;

TH_t – total hours actually worked in the period t.

Hourly labour costs are calculated separately on each of the following three labour cost categories: total labour costs, gross wages and salaries and other labour costs.

Labour cost indices are calculated and published in two ways – seasonally adjusted and non-adjusted. Seasonally adjusted data are indicators that allow estimating changes in economic processes in time series analysis more objectively, eliminating influence of seasonality, varying number of work days, various holidays (e.g., Easter, Ligo, or Christmas) on labour costs. Seasonally adjusted data are obtained with the help of specific data processing programme DEMETRA. When, after the seasonal adjustment, data of the new period are added, also data on previous periods are re-calculated.

The aggregate labour cost index for NACE Rev. 2 B–S is calculating using Laspeyres chain index method, where the total labour costs of previous year by NACE sections are used as weights. The weights are changed annually.

Base period

Base year of the Labour cost index is 2016.

Clasifications

Data on monthly average and real wages and salaries are compiled, calculated and published by using:

• Statistical Classification of Economic Activities in the European Community, Rev. 2 (NACE Rev. 2);
• Classification of Administrative Territories and Territorial Units of the Republic of Latvia (CATTU) (only for data on labour costs and structure);
• Classification of Institutional Sectors (only for data on labour costs and structure).

Contact person on methodology