The Italian Labour Cost Index (LCI): sources and methods

The EC Regulation N.450/03 requires the Member States the quarterly production and timely transmission to Eurostat of a comparable hourly Labour Cost Index, to be used as a key indicator in the analysis of short and medium-term economic development in the European context. The compilation of the Italian LCI is based on a very complex process combining different information contributing to the separate estimation of the numerator and the denominator. The use of administrative data as main source to estimate the labour cost components, at the numerator, implies some peculiar statistical issues to be faced taking into account also the binding timeliness in the release of the indicator. Referring to the denominator, the lack of a direct short-term business survey collecting the hours worked leads to the adoption of a temporal disaggregation technique to derive the quarterly estimates from annual business benchmarks. In the paper the main characteristics of the index and the compiling methods are described and the trends of LCI time series are analysed also in comparison to other short term statistics on labour cost. Since 2003, many efforts have been done to improve the overall quality of the Italian LCI in terms of accuracy, reliability, punctuality, coherence and comparability achieving very appreciable results and suggesting the possibility to release this indicator, in the near future, also at national level. However, some quality issues remain still open: the improvement in the estimation of the hours worked and the elimination of the incoherencies in the directly seasonally adjusted series. Moreover, attention has to be addressed also to the extension of the Italian LCI coverage to the economic activity sections L, M, N and O of Nace Rev.1.1. Parole chiave: Hourly Labour Cost, Chain Laspeyres Index, Principal European Economic Indicators, Integration of Sources, Temporal Disaggregation, Working Day and Seasonal Adjustment. Le collane esistenti presso l'ISTAT Contributi e Documenti costituiscono strumenti per promuovere e valorizzare l'attivita di ricerca e per diffondere i risultati degli studi svolti, in materia di statistica ufficiale, all'interno dell'ISTAT e del Sistan, o da studiosi esterni. I Contributi Istat vengono fatti circolare allo scopo di suscitare la discussione attorno ai risultati preliminare di ricerca in corso. I Documenti Istat hanno lo scopo di fornire indicazioni circa le linee, i progressi ed i miglioramenti di prodotto e di processo che caratterizzano l'attivita dell'Istituto. I lavori pubblicati riflettono esclusivamente le opinioni degli autori e non impegnano la responsabilita dell'Istituto.