QALI

Labour productivity is compiled in official statistics by dividing a measure of output (e.g. GDP or gross value added expressed in volumes) by the quantity of labour input, e.g. expressed as the number of persons employed or, to be more precise, the total hours actually worked.

However, as pointed out in the system of national accounts 2008, using total hours actually worked to calculate labour productivity implies that each hour worked is of the same quality regardless qualifications and skill levels.

This situation has prompted statisticians to compile experimental statistics that integrate quality in the calculations of labour productivity.

Quality-adjusted labour input (QALI) estimates the growth of hours worked (labour input) taking into account the quality of the workforce based on experience and skills. The hours worked by high productive workers are weighted higher than the hours worked by low productive workers.

This indicator should be considered as experimental for several reasons: some detailed results can't be published because of confidentiality and reliability of data sources, employment definition in LFS differs from national accounts, SES as a four-year survey should be interpolated for the years in between, industry classification has changed in 2008. Moreover, the weighing of hours using earning shares is not an assumption used in core national accounts.

Nevertheless, such an approach provides a more detailed picture of the input of labour to the production process. QALI is a more suitable method to use in growth accounting analyses as it better explains GDP developments.

QALI data should not be analysed on a year-to-year basis but as an indicator of trends over a longer period.

Quality adjusted labour input (QALI) aims to improve the measure of labour input by taking into account information that allows adjustments to be made in order to reflect the quality of the workforce based on experience (estimated by using the age of the worker) and skills (estimated by using the highest academic qualification attained according to the international standard classification of education). In practice, QALI is calculated as growth rates (or indexes) and not as labour input levels.

A Törnqvist index is used to estimate the QALI index.