Labour Cost Index

Relevance

The labour cost index (LCI) is an indicator which measures the cost of labour.  The LCI is a Laspeyres index of labour cost per hour worked, chain linked annually, and based upon a fixed structure of economic activity at NACE section level. The labour costs are the total quarterly costs incurred by the employer in the employment of personnel. Labour cost indices are produced individually for the following categories;

  • Total labour cost
  • Wages and salaries
  • Employers social contributions

Methodological description

The index is calculated every calendar quarter and is computed through the utilization of internal data available from the National Accounts Unit and the Labour Force Survey (LFS), in order to lessen the response burden on potential responding units.

Figures for total labour cost, wages and salaries, social contributions, and number of employees are compiled from National Accounts data.  Figures for actual hours worked by employees are estimated using employment figures available from the National Accounts Unit and weekly average actual hours worked available from LFS. Mean weekly actual hours worked by employees for each NACE division are retrieved from the LFS and these figures are multiplied by the respective figures on employment available from the National Accounts Unit.

Accuracy and reliability of data

LCI data is revised on a quarterly basis to reflect changes in data provided by the primary sources.  The last three reference years are considered ‘open’ to revision, since new information from various surveys provides additional updates on wages and salaries, and social contributions.

Timeliness and punctuality of data

Labour cost indices are transmitted to Eurostat within the 70 day deadline following the reference quarter.

Accessibility and clarity of data

At a national level, no statistics related to LCI are released, but data can be downloaded from Eurostat’s online database.

A quality report is compiled and sent annually to Eurostat whereas a national quality report is available on the NSO’s metadata website.

Coherence and comparability/consistency of data

Definitions used for the compilation of LCI are comparable between all European Union Member States; however the sources used for the production of this statistic vary between different countries. 

Subsidies which cover labour costs are included in figures of total labour cost because these can’t be estimated from National Accounts data.  The LCI sub-component of actual hours worked by employees is calculated differently using National Accounts employment estimates along with LFS averages.  Comparable estimates on actual hours worked are available from 2004 onwards; the reference year since when the LFS started to be carried out on a continuous basis.​

Metadata

Contact Information: 

 
Ms Joslyn Magro Cuschieri
Head of Unit​
2599 7662
labourmarket.nso@gov.mt