In the course of next year Statistics Netherlands (CBS), the Netherlands Bureau for Economic Policy Analysis (CPB) and DNB will start using a new definition for the labour income share (LIS). This new definition is in line with the proposed method in our 28 April 2016 DNBulletin. The revision is explained in more detail in the latest issue of the journalEconomisch Statistische Berichten.
At an aggregate level, the LIS is currently below its long-term average, which indicates that there is scope to increase labour compensation for employed persons and the self-employed. This does not mean, however, that labour costs may increase across the board, as there are also sectors and companies where the financial and economic situation does not allow it. Using CBS’ recently published sector-based LIS data, calculated according to the new definition, the scope for higher labour compensation can now be analysed at sector level .
New sector-based LIS
On a sector level, the new definition mainly impacts the development of the LIS in those sectors where the self-employed are relatively strongly represented, such as the construction sector and the hospitality & catering industry. Figure 1 shows the old and new LIS for eight sectors.