Chile (2)

Title of the survey

Encuesta sobre el Costo de la Mano de Obra y Remuneraciónes (Survey of Labour Costs and Earnings).

Organization responsible

Instituto Nacional de Estadísticas (INE)

Periodicity of the survey

Monthly

Objectives of the survey

To measure the evolution of workers' wages and of labour costs to the employer, both measured per hour paid for.

Main labour topics covered by the survey

Employment, earnings, labour cost and hours of work (normal and overtime).

Reference period

The month, for each variable.

Coverage of the survey

Geographical

The whole country.

Industrial

All branches of economic activity, with the exception of agriculture, hunting, fishing and forestry.

Establishments

All establishments in the formal sector with ten or more workers.

Persons

Employees with a contract of employment. Persons who work for a fee and persons under contract paid in a form which is other than earnings are excluded.

Occupations

The following groups are identified separately:

managerial workers,
professional workers,
technicians,
administrative workers,
workers in personal and protection services,
sales and demonstration workers,
skilled manual workers,
workers operating and assembling installations and machinery,
unskilled manual workers.

Concepts and definitions

Employment

An employee is defined as any person who renders personal, intellectual or material services, working under a a contract of employment, and in exchange for a fixed remuneration. Employees are all workers, including casual, temporary or seasonal workers, part-time workers, trainees, piece workers, commission agents and persons who are temporarily absent from work because of vacation, industrial dispute, sickness or accident etc. Contracted workers and home workers are excluded. Data on employees are collected separately for the occupational groups.

Earnings

These are defined as the total payments in cash or in kind which can be evaluated in money terms, which workers should receive from their employers under their contracts of employment, by reason of their employment or function. Employers' expenditure in the form of refunds of expenses incurred by workers because of their own work (for example, travel and subsistence allowances) are not included. Information is collected on each of the following components:

direct wages and salaries:
- basic wages and salaries.
  - basic wage or salary: fixed and paid for a full week;
  - other regular basic wages and salaries: advanced monthly bonus; professional allowances and allowances for qualification; premiums and allowances for seniority and years of service, work in remote or hazardous places; for responsibilities or duties and for the regular operation of machinery, machine tools and dangerous or delicate instruments, allowances for regular day or night shift work, for taxes and education and other basic regular allowances and bonuses;
  - wages and salaries for irregular work: premiums for temporary day or night shift work, occasional use of machinery, machine tools and dangerous or delicate instruments, for standing in or replacement and for other reasons entailing the undertaking by the worker of temporary tasks.
- incentives paid to workers; premiums, incentives or bonuses for output, productivity, attendance, punctuality and the like;
- earnings of workers on commission;
- commission paid on sales;
payment for overtime;
payment for hours not worked (for vacation, public holidays and leave of absence);
payment in kind;
housing and rent subsidy: operating costs borne by the employer as workers' housing costs;
profit-sharing, bonuses and additional non-monthly payments;
social security costs:
- social security payments made directly to workers by the employer: bonuses or allowances for education and/or creches, for marriage, transport allowances, allowances for the feeding of nursing mothers and family allowances paid directly by the employer, death benefit, direct payments to the employee when the latter is absent because of sickness, maternity, industrial accident or occupational disease, and statutory allowances or premiums for social security;
- subsidies transferred by the employer to the worker: statutory family benefits and other subsidies paid by social security or pension organizations unconnected with the enterprise.

The total for each component of earnings is recorded for each occupational group. Since the main aim of the new system of statistics is to produce monthly indicators of the evolution of earnings, the following components, which vary at times and which require separate treatment, are excluded from the statistics (earnings index):

supplementary payments for overtime;
non-monthly gratuities and profit-sharing bonuses; and
additional payments to workers for vacations and year-end bonuses.

Separate data are also collected on obligatory statutory deductions from earnings, i.e. payment of taxes and obligatory contributions to social security.

Labour cost

This is the sum of earnings plus the costs to the employer for training and for welfare services for the benefit of employees, less the amounts paid to the employer by social security schemes (e.g. family allowances granted by the state). Information is collected on the following components:

basic wages and salaries as defined under Earnings, plus:
- reimbursement or expenditure, i.e. bonuses or allowances, for food, transport (including refund of travelling expenses), for cash losses, transfers, wear and tear on tools, travel allowances and representation expenses;
payment for overtime;
payment for hours not worked;
payments in kind;
housing and rent subsidies;
social security costs as defined under Earnings, plus:
- payments by employers to social security schemes: employers' contributions to social security against covering industrial accidents and occupational diseases, life assurance and the like. Direct social security payments are regarded as part of the gross earnings and are therefore not included here; and less:
- subsidies transferred to the worker by the employer;
employers' costs for training and further training; reimbursement of the workers' registration fees, fees and other payments for the services of instructors from outside the enterprise or for those of training schools, and payment for teaching materials. The portion of these expenses which can be recovered as tax concessions is excluded;
Cost of welfare services borne by the employer: operating costs (except for wages) of canteen services, cultural services, medical care, recreation, education, etc., within or outside the enterprise, for the benefit of the workers;
severance and termination pay;
other labour costs borne by the employer: cost of footwear and working clothes provided to the worker, recruitment of workers and transport of workers (between their homes or other place and the place of work, or between the place of work and a welfare service).

The total for each component is recorded for each occupational group. For the purpose of the statistics (indices of labour costs), types of costs which change considerably from one period to another and which require separate treatment, are excluded from the data. These include:

severance and termination pay;
non-monthly gratuities and profit-sharing benefits;
additional payments to workers for vacations and year-end bonuses.

Hours of work

Hours paid for, whether worked or not worked, are measured, and normal hours and overtime are collected separately for each occupational group.

International recommendations

The definition of earnings conforms to the current international recommendations on statistics on gross earnings. However, the statistics (earnings index) refer only to the normal working day, and exclude irregular payments such as semi-annual or annual bonuses and payments for overtime. With some exceptions, the definition of labour cost conforms to the current international recommendations on labour cost. However, it excludes costs such as the depreciation of buildings and equipment and costs of interest, repairs, maintenance and other costs. Furthermore, the statistics (indices of labour costs) exclude irregular payments such as semi-annual or annual bonuses, and severance and termination pay.

Classifications

Components of labour cost / compensation of employees

Not relevant.

Industrial

The International Standard Industrial Classification of all economic activities (ISIC), Rev. 2, 1968 is used, at the four-digit level.

Occupational

The International Standard Classification of Occupations (ISIC-68) is used.

Others

None.

Sample size and design

Statistical unit

The reporting unit is in principle the establishment, characterized by its economic activity. Where information for an enterprise cannot be given separately, for its different economic activities, data for all the activities are reported under to most important activity. Establishments, services, enterprises and institutions which make up the major divisions of economic activity are designated entities.

Survey universe / sample frame

A general directory has been compiled based on the lists of entities in each of the major divisions of economic activity. The lists are kept by state institutions such as the national geological and mines service, the Chile telephone company, the national civil aviation authority, etc., or by specialist departments of the INE. They are compiled through a census or, where this has not been possible, by a representative sample of stable entities in the most important parts of each major division. A stable entity is one which has a high probability of remaining in the market. This probability is taken as the proportion of the number of workers or to some related variable to the level of activity of the enterprise or institution, such as turnover. For this, it was also necessary to undertake surveys of the entities themselves in order to determine whether they should be included in the directories or not. The complete directory contained 12,300 units. It was divided into 150 strata, according to type of activity and size of entity (number of workers or turnover).

Sample design

At the beginning of 1992, the INE carried out a one-off occupational classification survey, the sole purpose of which was to establish the required classification of occupations. The sample of this survey was selected by stratified random sampling; a random sample of not less than seven per cent of the entities was selected from each stratum, resulting in a total of 2,047 entities. The sample for the monthly survey corresponds to a random sub-sample of the previous sample, with 1,338 entities of ten or more workers. Overall, this sample represents 10.9 per cent of the entities and 13.7 per cent of the workers; this represents more than seven per cent of all entities and more than eight per cent in respect of all workers, in each major division of economic activity.

Field work

Data collection

The occupational classification survey was carried out first for all the units covered in the monthly Survey of Labour Costs and Earnings, in which the informants were asked to supply information on occupations and the types of payment made to workers. When the replies were received, the data were coded, the occupational classification for each entity was determined, and with this information a database was created with all the records of each entity. In turn, each entity was allocated a classification. The questionnaires are distributed to the entities every three months by a team of enumerators, and the entities generally forward them in turn to the INE.

Survey questionnaire

This contains six sections:

the reference date of the questionnaire and date for return,
particulars of the person responding and of the enterprise or institution,
tables of data:
- number of workers,
- totals of the components of labour costs and gross earnings,
- total deductions,
- number of hours paid for,
by occupational groups,
instructions for classification of workers by occupational groups,
explanatory notes on the components of labour costs and gross earnings and deductions,
information on changes.

Substitution of sampling units

Not relevant.

Data processing and editing

As soon as the survey data have been collected, they are processed by computer with the aim of ensuring that established norms are observed. Each responding entity has its own code, and the verification stage comprises three levels of analysis of the consistency of the information supplied: consistency with the reported occupational structure, consistency at that date, and consistency over time. After verification, the indicators are calculated by computer.

Types of estimates

Average earnings and labour cost per hour, by economic activity and occupational group.

Construction of indices

The Laspeyres formula is used to calculate an index of earnings per hour and an index of labour costs per hour. The components of the structure of hours paid for per normal working day, for all the workers employed in the sample of establishments, by occupational groups and economic activities, with base April 1993=100, are used as the weights factors for the statistics of average earnings and the sub-indices of the index of earnings. For the evaluating factors of labour costs, the weighting correspond to the labour costs during the base month.

Weighting of sample results

See under Construction of indices

Adjustments

Non-response

Missing data are imputed.

Other bias

None.

Use of benchmark data

These are used in the processing of data.

Use of other surveys

Not relevant.

Indicators of reliability of the estimates

Coverage of the sampling frame

Not available.

Sampling error / sampling variance

The standard deviation, the coefficient of variation and the relation between the bias of the estimator and its standard deviation are estimated.

Non-response rate

Not obtained.

Non-sampling errors

Not available,

Conformity with other sources

A simple comparison is made out with indices obtained from private enterprises.

Estimates for non-survey years

Not relevant.

Available series

index of earnings per hour paid for (monthly),
index of hourly labour cost per hour paid for (monthly),

at the national level, by branch of activity and occupational group, and cross classifications (72 group-divisions).

History of the survey

The Survey of Labour Costs and Earnings began in April 1993. It took the place of its predecessor, the Index of Earnings, which was derived from the Survey of Employment and Earnings. The concepts were extended, the coverage of the sample enlarged, and the occupational classification was brought up to date.

Documentation

Instituto Nacional de Estadística (INE): Indicadores Coyunturales (Santiago; monthly). Methodological details of the survey are published in: idem: Methodología del Sistema de Estadísticas de Salarios (ibid.; 1994). The survey data are stored on computer tape.

Confidentiality / Reliability criteria

The publication of data on earnings is governed by the data protection law, No. 17 374.

Other information

Data supplied to the ILO for publication

Indices of average monthly earnings in non-agricultural activities and certain industries are published in Tables 16 to 20 of the Yearbook of Labour Statistics. Monthly indices of average hourly earnings in non-agricultural activities and manufacturing are also published in the Bulletin of Labour Statistics.