Measuring low pay: Focus points and rounding

Summary Earnings information from household surveys is less accurate than employer information. Household surveys include proxy responses and may not use documentation, so earnings are often approximated at 'round' values. However the setting of the 2005 NMW at £5.05 provides a natural experiment in how survey responses are approximated. This paper identifies a tendency to round certain information: employers in setting hourly wage rates and employees in reporting their earnings in household surveys. An important implication, that LFS low pay estimates will be affected by the proximity of the NMW to round numbers, is demonstrated by comparing low pay estimates across years

What is known about numbers and “earnings“ of the self-employed?

Identifies the self-employed in a number of different sources and examines their ââ¬Ëearningsââ¬â¢ using information from household surveys.There is currently very little information available about the so-called “earnings“ of the self-employed, particularly because by definition they do not earn a salary or wage.This article firstly identifies the self-employed in a number of different sources using two perspectives: the individual perspective obtained through self-classification in household surveys and the legal perspective set out by HM Revenue and Customs (HMRC). Thiswork suggests that self-classification as self-employed in household surveys can be adjusted towards the legal perspective using information on the types of self-employment and payment of tax and National Insurance.The “earnings“ of the self-employed are then examined using information from household surveys and compared with aggregate figures published by HMRC. Economic & Labour Market Review (2007) 1, 48–56; doi:10.1057/palgrave.elmr.1410108

Linking ASHE and LFS: can the main earnings sources be reconciled?

Describes a project to link and study ASHE and the LFS, examining differences between earnings and hours information collected.This article describes a project to link and study the Annual Survey of Hours and Earnings and Labour Force Survey. Thisinvestigation looked at the differences between the earnings and hours information collected on the surveys. Theresults show that some perceptions over the accuracy of the surveys are misplaced, and that researchers can have moreconfidence in using the data. Economic & Labour Market Review (2007) 1, 24–31; doi:10.1057/palgrave.elmr.1410041

Issues in the measurement of low pay

Describes three related investigations into differences between the official ASHE measure and supplementary LFS measure.The UK uses two major surveys to produce low pay estimates; the official ASHE measure and supplementary LFS measure. The differences between these measures have been accepted as a consequenceof the different survey methods and purposes.This article describes three related investigations into these differences. The first shows how the timing of measurement is important and suggests evidence of non-compliance. The second examines the perceived inaccuracy ofresponses in household surveys and how this affects LFS low pay estimates. The third shows that the measure of hourly rate used can explain much of the difference between the estimates.This work supports the current methods for generating low pay estimates and highlights the need for an awareness of these background issues when interpreting the estimates. Economic & Labour Market Review (2007) [1], 37–45; doi:10.1057/palgrave.elmr.1410090