Measuring Labour Services: Quality‐Adjusting the Entry and Exit of Workers

27 Pages Posted: 26 Mar 2018

Date Written: April 2018

Abstract

Many statistical agencies use the sum of hours worked when measuring labour services. This implies that all workers provide work of equal quality. Various indices for adjusting for labour quality have been employed in a large body of literature. However, this literature has not yet addressed the issue of how to quality‐adjust the impact of workers entering and exiting the labour market. We outline a theoretical framework for dealing with quality adjustment of labour services caused by workers entering and exiting employment. To illustrate the theoretical framework, we use the case of Norway in the period 1997–2013. The impact on labour services due to our quality adjustment of net entry is found to be cyclical. While the adjustment for the quality of net entry amounts to about −0.3 percentage points annually during expansions, it is offset by about the same magnitude during contractions.

Keywords: Index numbers, labour services

Suggested Citation

von Brasch, Thomas and Cappelen, Ådne and Iancu, Diana‐Cristina, Measuring Labour Services: Quality‐Adjusting the Entry and Exit of Workers (April 2018). The Scandinavian Journal of Economics, Vol. 120, Issue 2, pp. 597-623, 2018. Available at SSRN: https://ssrn.com/abstract=3149197 or http://dx.doi.org/10.1111/sjoe.12242

Thomas Von Brasch (Contact Author)

Statistics Norway

N-0033 Oslo
Norway

Ådne Cappelen

Statistics Norway

N-0033 Oslo
Norway

Diana‐Cristina Iancu

Statistics Norway ( email )

N-0033 Oslo
Norway

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