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| LCI101F - The percentage change of the quarterly labour cost hourly index, as against the same quarter of the previous year, by CANE Rev.2 economic activity, adjusted series by seasonal and working days effect |
| Definition |
The quarterly labour cost hourly index is a short-term indicators allowing the assessment of the hourly cost trends incurred by the employer with the employed labour force. The methodology used and data series are built in accordance with the provisions of the European Parliament and Council Regulation no.450/2003 concerning the labour cost index.
The quarterly labour cost indices are calculated as Laspeyres type indices for the total labour cost and its two components: direct costs (wages and salaries) and other costs (non-wages costs), with 2020 as reference year.
The quarterly labour cost indices are calculated and disseminated as provisional indices for year (N) and recalculated as final during year (N+1), when the data from the annual survey on labour costs for year N become available.
Total labour cost - represents all the expenditure - direct and indirect (other) - incurred by the employer with labour force. According to the European methodology, are excluded the expenditures of the employer with: the vocational training of employees; staff recruitment; work and protective equipment for work related activities and not for personal use.
Total labour cost excluding bonuses - represents total expenditure incurred by the employer with labour force, as described above, excluding the occasional bonuses, not paid regularly at each (monthly) pay period (i.e. bonuses and allowances paid at fixed periods, or paid quarterly, bi-annually or annually, bonuses linked to individual or collective performance, bonuses for holidays or the 13th salary).
Direct costs (wages and salaries) - include the gross amounts paid from the salary funds for hours worked (including bonuses and other benefits), payment for days not worked, payment in kind (according to collective agreements), gross payment from net profit of the unit, gross payments from other funds (including in kind) according to national legislation in force. In the direct costs is also included the mandatory social contributions of the employees (social security contribution, respectively, social health insurance contribution paid by employees). Until 2018, the mandatory social contributions of the employees include: the contribution of employees to the unemployment insurance budget, the individual social insurance contribution and the contribution of employees to social health insurance.
Other labour costs (non-wages costs) - include the employers social contributions, gross payment for employees leaving the unit (retirement, transfer, detachment etc.), gross payments for work breaks not-imputed to the employees, other labour costs.
Average hourly labour cost represents the ratio between the employers costs as result of engaging the labour work force and the number of hours actually worked.
Number of hours actually worked includes the total number of hours worked during the usual working time and the overtime (additional to the normal working hours, during the weekends, holidays etc.). |
| Periodicity |
Quarterly |
| Data sources |
Labour cost index details
The quarterly labour cost indices are calculated based on the information obtained from the following two statistical data sources:
Monthly Wage and Salary Survey details
and Labour Cost Survey details
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| Methodology |
The percentage change of the quarterly labour cost hourly index as against the same quarter of the previous year is calculated as follows:
R(LCI)=LCI(t)/LCI(t-4)*100-100
R(LCI)= the percentage change of the quarterly labour cost hourly index in the current quarter "t'' compared to the same quarter of the previous year "t-4''
LCI(t) = labour cost index for quarter "t''
LCI(t-4) = labour cost index for the same quarter of the previous year "t-4''
In relation to the situation caused by the COVID-19 pandemic, the infra-annual, statistical data may present a lower degree of reliability, accuracy, completeness and comparability, as a result of the difficulties arising from the application of economic and social measures, determined by the declaration of state emergency/alert throughout Romania. These difficulties were mainly determined by heavy access to the financial and accounting documents, caused frequently by the sudden closure of certain economic and social units, by not completing in due time of the respective documents, by relaxation of legal deadlines for submitting tax documents to the related institutions, by temporarily suspending the activity for a significant number of economic and social units or even by ceasing their activity, in some cases.
In the hourly labour cost are also included the amounts paid to the employees for technical unemployment, borne by the employer from its own funds. Subsidies granted to employers (according to legal provisions, including in the context of the situation caused by the COVID-19 pandemic and the state of emergency/alert) from the state budget for the payment of the benefits received by the employees during the temporary suspension of their labour contract, at the employer initiative (technical unemployment), parents during the days off for childcare, in situations of temporary closure of educational institutions and employees whose working hours has been temporarily reduced (the difference between the gross basic salary stipulated in the individual labour contract and the gross basic salary related to the hours actually worked as a result of the hours reduction) were estimated based on administrative data and deducted from the hourly labour cost (according to the provisions of the European Parliament and Council Regulation no. 450/2003 concerning the labour cost index). Furthermore, the indicators are affected by the evolution of the hours actually worked (including by the activity interruption in Covid-19 context).
Besides the gross (unadjusted) series of quarterly labour cost indices, the following adjusted series are also calculated:
a) by working days effect and
b) by seasonal and working days effect,
being eliminated the effect of the variation of the number of working days from one quarter to another, as well as the effect of the seasonal variation.
The adjustment was done by regressive method, according to the recommendations of the Regulation of Council and European Parliament no. 450/2003 regarding quarterly indices of labour cost.
For adjustment it was used the software package JDEMETRA+ v2.1 (TRAMO/SEATS method), which estimates the effect of working days number different from one quarter to another and effect of calendar (leap year and other national holidays), as well as the identification and correction of the outliers (occasional level changes, transitory or permanent ones).
Adjusted series by working days number was obtained eliminating these effects from gross series, by means of correction coefficients, set up according to the regression model used (additive or multiplicative). The adjustment was done by indirect method, respectively, applying the adjustment method at lower levels (over the indices components), adjusted indices being calculated from the adjusted components. The estimation of unobserved components (trend-cycle, seasonality and irregular component) is developed by the SEATS software based on ARIMA models. The seasonal and working days adjusted series were obtained by eliminating the seasonal component from the adjusted series by working days effect.
The entire adjusted series WDA (working days adjusted) and SA (working days and seasonally adjusted) are annualy revised due to the data availability of the Labour Cost Survey and annual revision of the adjustment procedures.
According to the national legislation provisions in force (GEO No. 79/2017, as subsequently amended and supplemented), the social security contribution and the social health insurance contribution paid by the employer were transferred to the employee; thus, starting with January 2018, these contributions are borne entirely by the employee, and reflected in the gross amount of the nominal earnings (direct labour cost). These legal provisions do not affect the data series comparability for the "Total labour cost index".
Instead, the data series for the two components of the quarterly labour cost index: "direct costs (wages and salaries)" and "other costs (non-wages costs)", are no longer comparable starting with the 1st quarter 2018 to the data series prior to 2018, as a result of transferring the contributions from employers towards employees.
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| Last update |
SEP 02, 2024 |
| Observations |
The data for period 2000 - 2008 were estimated according to the new Classification of Activities in the National Economy (CANE Rev.2) harmonised with European classification in the field (NACE Rev.2). Applied estimation method relies on conversion matrix of economic activities defined according to CANE Rev.1 in economic activities defined according to CANE Rev.2. Building up the conversion matrix relies on data collected according to CANE both versions, by monthly statistical survey on earnings, during 2008, respectively by yearly statistical survey on labour cost for 2007.
The data are available starting with 2001.
In the first quarter of 2023 the whole series of data (2000-2022) were recalculated by changing the base year from 2016 to 2020.
In the third quarter of 2023 the data related to 2022 and the first two quarters of 2023 were recalculated due to the fact that the results of Labour Cost Survey for year 2022 became available. |
| Responsible person |
Popescu Diana Elena; e-mail:diana.popescu@insse.ro; int 2281 |
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