Index of labour costs
Updated: 22 November 2021
Next update: 22 February 2022
About the statistics
The labour cost index measures changes in total labour costs per hour.
- The labour cost index
Measures changes in total labour costs, direct labour costs ad indirect labour costs per hour. Total labour costs are the sum of direct labour costs and indirect labor costs.
- Direct labour costs
Include wages and salaries, remuneration and other cash payments like paid annual leave, sickness pay, representation allowances. In other words, payment for hours not worked are also included in direct labour costs. The main sources for direct labour costs are wage totals and wage index.
- Wages and other remuneration
Contains basic paid salaries and other cash payments, among others, sitting-allowances paid to committee members, paid annual leave, sickness pay, representation allowances, and benefits from cashing in or selling options in employment relations.
- Payment for hours not worked
Includes, among other things, paid annual leave, sickness pay, pay for various leave of absence and expenses on extra holidays.
- Indirect labour costs
Include salaries in kind, costs for health and safety, social contributions, training costs and taxes on labour. The main sources for indirect labour costs are the labour cost survey for training costs, costs for health and safety, most social contributions and some of the salaries in kind, and the wage totals for some social contributions and most salaries in kind.
- Salaries in kind
Is a common term for benefits besides the usual salaries. It includes, among other things, costs in connection with free cars, car allowances, free telephones, free newspapers, various welfare initiatives and taxable salaries in kind. Taxable salaries in kind are got from The Register of End of the Year Certificate, which includes, among other things, collective insurance contributions, free food and lodging, toll or monthly travel cards paid by the employer, free electricity, free housing, holiday trips paid by the employer and benefits from contributions to kindergartens for employees' children.
- Costs of health and safety
Include costs of health services provided by the company, and costs of various workplace safety initiatives to the benefit of employees.
- Social contributions
Are expenditures on pension schemes and insurance such as insurance against occupational injury and insurance against accidents.
- Training costs
Include, among other things, the costs of participation in external courses and further education paid for by the employer, the costs of running schools and courses run by the company, the costs of recruitment and the costs of training new employees.
- Hours worked
The index shows changes in labour costs per hour. The data sources have information on contractual working hours and the number of overtime. Hours worked are the sum of contractual working hours and overtime.
Before 2009 the industrial classification in the Labour Cost Index is defined by economic activities according to Standard Industrial Classification SN2002 , which is the Norwegian version of International Industrial Classification, also known as NACE Rev. 1.1.
From 2009 a new version of Norwegian Standard Industrial Classification SIC2007 is in use, which is in accordance with the EU’s new NACE Rev. 2.
Name: Index of labour costs
Topic: Labour market and earnings
Division for Structural Business Statistics
The labour cost index is compiled every quarter, and is published no later than 70 days after the end of each quarter.The published figures may be revised by changes in labour cost survey.
The final file from which the statistics are calculated are maintained and saved.
The background of the labour cost index is the need for more timeliness in the measurement of changes in labour costs. The purpose is therefore to show changes in labour costs through the year.
The index was published for the first time for the third quarter of 2004, with back indices to the first quarter of 1998.
From 1st quarter 2009 Statistics Norway has introduced a new version of Norwegian industry classification (SIC2007). This new classification provides a more suitable and updated description of the activity concerning both the private and public sectors, with more focus on service industries.
The early time series of Labour cost index for the period from 1st quarter 2000 to 4th quarter 2008 are therefore recalculated based on SIC2007. Time series in accordance with SIC2002 will not be published as from January/first quarter of 2009, but will be available in StatBank.
The labur cost index was revised in the publication of fourth quarter 2009 and 2018, due to the results in the labour cost survey 2008 and 2016.
The principal users of the labour cost index will be Eurostat, the Technical Reporting Committee on income Settlement , Statistics Norway's National Accounts and business.
No external users have access to the statistics and analyses before they are published and accessible simultaneously for all users on ssb.no at 8 am. Prior to this, a minimum of three months' advance notice is given in the Statistics Release Calendar. This is one of Statistics Norway’s key principles for ensuring that all users are treated equally.
The development in the labour cost index will tally with the development in wage-cost totals in the National accounts and the labour cost survey.
Council regulation (EF) nr. 450/2003 of 27 February, concerning short-term statistics on labour costs.
The population covers all the establishments in Statistics Norway's Central Register of Establishments and Enterprises, industrial groups B to S, according to Standard Industrial Classification.
The labour cost index is carried out within the frame work set by the data sources. The units included in the statistics are consequently limited to those units included in the quarterly wage index, annual wage statistics, the labor cost survey and wage totals from The Register of End of the Year Certificate.
The statistics is based on full cencus data from a-meldingen. More about A-meldingen
The labour cost index has no data collection of its own.
The indices are checked against historical series and are compared with the published statistics from the data sources.
The labour cost index is a Laspeyres index with fixed weights. The labour cost index is constructed as a sum of sub-indices for cost components constituting total labour costs. Changes in labour costs are estimated and then weighted together to obtain a labour cost index, where weights are based on information from the labour cost survey.
The index is an unadjusted index. It is neither working day nor seasonally adjusted. This means that the index shows changes in labour costs per hour and that variations in the number of working hours or days between the quarters do not affect the index in the present quarter.
The labour cost index was produced for the first time with figures for the third quarter of 2004 and is comparable back to 1998 for all the economic activities covered.
From the 1st quarter of 2009 Labour cost index publishes in accordance with SIC2007 and the reference value changes to the average of the quarters in 2005, such that 2005=100.
The index values are comparable only within the same version of Standard Industrial Classification .
Measurement errors in the labour cost index relate to the possibility of inconsistencies between the data sources with respect to the definitions of variables.
Processing errors in this connection, relate to the utilization of the data material from the data sources in a homogeneous way.
The labour cost index is not encumbered by sample bias of its own.
Every source of data is linked to industry code in Statistics Norway's Central Register of Establishments and Enterprises. Incorrect information in the register my result in industrial misclassification of units.
The labour cost index is constructed by putting several statistics together, where weights are used to weight the statistics. The way in which this weighting is built up is a source of model error.
One model assumption is that the data sources reflect the true distribution of the population, respecting units, variables and labour cost components.
From 2015 the statistics is mainly based on data from a-meldingen. Here also, observations can be discarded due to missing information and/or incorrect values for the variables.
The published figures may be revised by changes in labour cost survey which is conducted every fourth year.
Preliminary figures will be final when the statistics on labour cost survey is published.
The labur cost index was revised in the publication of fourth quarter 2018, due to the results in the labour cost survey 2016.