Economy 22 March 2023, 2:55pm

Hungary stats office renews earnings data reporting

Portfolio

Hungary's Central Statistical Office (KSH) has announced on Wednesday that its earnings statistics have been reformed and a new methodology will be applied from January 2023.

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"From the reference month of January 2023, the Central Statistical Office (KSH) will focus on the full range of employers in its earnings statistics data releases. Earnings data for January 2023 focusing on the entire economy will be published on 28 March 2023," the KSH said.

It is of the utmost importance for the KSH that its statistics meet user needs as fully as possible. To this end, the Office is continuously exploring the possibility of expanding the data available, the stats office added in a statement.

As of 2022, as additional information, the KSH has also started publishing monthly earnings data for full-time employees for the full range of employers.
And from the reference month of January 2023, earnings statistics will also focus on the full range of employers.
At the same time, data from organisations with five or more employees, representing the previous headline indicator, will remain available to ensure the comparison of long time-series.

Portfolio has previously suggested that the KSH writes its preliminary releases based on data for the budget sector, the non-profit sector and companies with more than five employees, but it is worth considering including data for the national economy as a whole.

The picture would be more complete if the data presented in the press release covered the whole economy. This would remove in one fell swoop the very common criticism of the KSH's earnings statistics that "it does not include the low-paying small firms that would make the average worse".

In response to our nudging last year, the KSH replied that they would be able to calculate earnings data for the whole national economy from 2019, which means that a short time series is available. On the other hand, there is a lot of legislation linked to the KSH's earnings data series that refers to earnings for this narrow range, so the data cannot be replaced overnight.

Therefore, the text of the flash release covers the narrowed reference group, but the accompanying tables already include earnings data for the full range of employers. In total, the difference between the gross wages of the group of over five employees and the whole economy is currently in the order of HUF 13,000 (about 3%), which is less than many people assume, the KSH argued at the time.

According to the latest release of the KSH, "for decades, the primary indicator of earnings statistics has been the average gross earnings of full-time employees in enterprises with at least five employees, all budgetary institutions and non-profit organisations of significant employment importance.

"The narrowing of the scope of employers was previously justified by the need to keep the reporting burden at a reasonable level for the smallest enterprises, and from 2019 onwards, the main professional and user consideration was to allow long time-series comparisons. There is now also a sufficiently long time-series for the full range of employers to focus the reporting on this group".

"The difference between the main indicators calculated for the two reference periods is not significant. Between 2019 and 2022, there was a difference of 2.6 and 3.5% (i.e. HUF 10,000 and HUF 19,000) per month in average gross earnings. For median gross earnings, the difference between the figure for the full range of employers and the figure for the population of at least five employees was between 5.1 and 2.9% (i.e. HUF 9,000 and HUF 20,000)," the KSH said.

"The KSH trusts that the changes detailed above will be to the satisfaction of all users. The changes to the individual information products will be published on 28 March, at the same time as the publication of the flash release," the statement concludes.