Standardised index of average earnings

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Labour and Income, Social Statistics.
Kirstine Andreasen
+45 39 17 31 28

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Standardised index of average earnings 2023

The purpose of the standardised index of average earnings is to estimate the developments in pay levels for employees in Denmark, adjusted to the extent possible for changes in the labour market’s occupational composition, e.g. shifts of employees between industries and/or occupation. The statistics are used for e.g. monitoring of business cycles, regulation of contracts, analyses of developments in pay levels as well as input in the calculation of the National Accounts.

The statistics have been prepared since 2018 with data back to the first quarter of 2016. A revised index and time series are published in May 2023 with data back from 2016.

In parallel, Statistics Denmark is calculating the implicit index of average earnings. Unlike the standardised index, the implicit index of average earnings does not take changes in the occupational composition into account.

Statistical presentation

The standardised index of average earnings is a quarterly estimate of the developments in pay levels for employees in Denmark, adjusted to the extent possible for changes in the occupational composition, e.g. shifts of employees between industries and/or occupation. The statistics show the development in the average hourly earnings for employees by sector, industry (DB07) and main occupation (DISCO-08). Each quarter, an index value and an annual increase are published.

Statistical processing

Data for these statistics are collected quarterly. For the public sector all payroll information are collected while data are collected via a sample from the private sector. The collected data is validated at an aggregate level for key enterprises (only in the private sector) and at an individual level through a combination of validation rules for the hourly earnings for the individual employment relationship. The hourly earnings are assessed based on sector, industry, main occupation and type of employment. Once data has been validated, base index is calculated for each homogeneous group, which afterwards is aggregated to sub- and total indices at sector, industry or main occupation level.

Relevance

These statistics are relevant for private enterprises and organisations, as well as ministries and other public institutions for analysis, contractual regulation etc. The statistical data are also used in other areas within Statistics Denmark, e.g the calculation of the Danish National Accounts.

Accuracy and reliability

The accuracy of these statistics are higher for employees in the public sector than in the private sector. The reason for this is that the statistics for employees in the public sector (more or less) consists of all payroll information, while the statistics for employees in the public sector is based on a sample of enterprises. The accuracy of the statistics for the private sector is therefore affected by sampling uncertainty, completeness of the reported information and non-response. The impact on the indices are unknown.

Timeliness and punctuality

These statistics are published two months after the end of the reference period. The statistics are released typically without delay according to scheduled dates of publication.

In February 2022, the statistics were paused and a comprehensive service review was initiated. As a result, the method for calculating standardized index of average earnings was revised. This publication therefore contains revised index values and annual increases for the entire period from the first quarter of 2016 until the first quarter of 2023. This means that the series contains revised values from the first quarter of 2016 until the third quarter of 2021 as well as previously unpublished values from the fourth quarter of 2021 until the first quarter of 2023.

Comparability

The standardised index of average earnings was first published in December 2018 with a time series starting in the first quarter of 2016. The standardised index of average earnings utilize the same data as the implicit index of average earnings, which however has a different purpose and is therefore calculated using a different method. There exist a few sets of statistics abroad that are partly comparable with the standardised index of average earnings.

Accessibility and clarity

These statistics are published quarterly in a Danish press release, at the same time as the tables are updated in the StatBank. In the StatBank, these statistics can be found under the subject Indices of average earnings. For further information, visit the subject page for Income and earnings.