Implicit index of average earnings

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Labour and Income, Social Statistics.
Jesper Moltrup-Nielsen
+45 3917 3423

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Implicit index of average earnings 2023

These statistics show the development in average earnings, calculated on the basis of an arithmetic average of salaries of all employees within the same sector and economic industry. In relation to the publication of the new Standardised index of average earnings, these indices were renamed to Implicit index of average earnings. In the new index changes in the workforce is taken into account when calculating the development in earnings.

The Implicit index of average earnings goes back to first quarter of 2005 for the private sector and first quarter of 2007 for the public sector.

Statistical presentation

The Implicit index of average earnings is a quarterly statistic of the development in wages for all employees in Denmark, including students and young persons under 18. The indices are available by sector and economic industries and follow the classifications Dansk Branchekode (DB07) and sector (SBR).

Statistical processing

Data is collected from a sample of companies and organisations as well as the entire public sector, covering the middle month of the quarter.

Data is validated by using fixed boundaries, both at individual and company level. Manual corrections are also made if required. Only companies that are present in both quarters are included in the calculations.

In the calculation of the most detailed sub-indices, data for the private sector are weighted to the target population and the individual employment types are weighted with the hours worked.

Relevance

The Implicit index of average earnings is a so-called unit value index, where wage trends are estimated on the basis of a simple salary average of all employees in the same industry. This means that wages partly reflect changes in staff composition in a given industry.

Private enterprises as well as ministries etc are the central users. The index is used especially in connection with various contract regulations, as well as the regulatory scheme in the public wageagreements.

The Implicit index of average earnings is the wage index that comes closest to being comparable to the European LCI.

Accuracy and reliability

For the public sector the statistics are based on data for virtually all employees. For the private sector, there are two factors that can affect accuracy, namely uncertainty in the sample statistics and that there may be problems with the completeness of the reported data from the company.

This index is an where the sum of wages and hours worked is counted in each group (etc. activity sector). Thus, changes in personnel in a given industry will have an impact on the measured wage development.

The figures do not undergo revision; the published figures are usually final.

Timeliness and punctuality

The implicit index of average earnings are published approx. 60 days after the end of the reference quarter, at the same time as the standardised index of average earnings is published. These statistics are published without delay.

Comparability

The standardised index of average earnings is comparable since first quarter 2005 but for some sectors, comparable wage indices also exist further back in time. The implicit index of average earnings is based on the same data as the standardised index of average earning, but there are significant differences in methodology that allow the two wage indices to be used only partially for comparison.

Internationally, the implicit index of average earnings can be compared to the labor cost index collected and published by Eurostat for all EU countries.

Accessibility and clarity

The implicit index of average earnings is published in Statistics Denmark’s newsletter on [https://www.dst.dk/da/statistik/nyheder-analyser-publ/nyt?psi=1931), together with the standardized index of average earnings. In Statbank Denmark, indices and annual increases are published under the implicit index of average earnings . More information can be found on the subject page on Income and earnings.