1. Indicator

(a) Name: Unemployment rate.
(b) Brief Definition: Unemployment rate is the ratio of unemployed people to the labour force.
(c) Unit of Measurement: %.

2. Placement in the Framework

(a) Agenda 21: Chapter 3: Combating Poverty.
(b) Type of Indicator: Driving Force.

3. Significance (Policy Relevance)

(a) Purpose: The unemployment rate measures the part of the labour force which, during the survey reference period, was neither (i) at work nor temporarily absent from work (i.e. not in paid or self- employment); (ii) available for work; or (iii) seeking work.

(b) Relevance to Sustainable/Unsustainable Development: Unemployment is useful and relevant to measuring sustainable development, especially if uniformly measured over time, and considered with other socioeconomic indicators. It is one of the main reasons for poverty in rich and medium income countries and among persons with high education in low income countries (no work, no income but compensation from insurance schemes or other welfare state systems whenever they exist). It should be noted, however, that it is common to find people working full-time but remaining poor due to the particular social conditions and type of industrial relations prevalent in their country, industry, or occupation.

(c) Linkages to Other Indicators: This indicator is linked to other socioeconomic indicators such as poverty measures and adult literacy.

(d) Targets: National targets for unemployment are common.

(e) International Conventions and Agreements: See 7 iii below.

4. Methodological Description and Underlying Definitions

(a) Underlying Definitions and Concepts: The definitions for labour force, employed population, and unemployed population are well established by international agreements (see section 7 below).

i) Labour Force: The current economically active population or labour force has two components: the employed and the unemployed population. The international standard definition of labour force established by the Thirteen International Conference of Labour Statisticians (ILO, 1982) is based on the following elements:

--The survey population: All usual residents (de jure population) or all persons present in the country at the time of the survey (de facto population). Some particular groups, such as the armed forces or other populations living in institutions, nomadic people, etc. may be excluded.

--An age limit: In countries where compulsory schooling and legislation on the minimum age for admission to employment have broad coverage and are widely respected, the age specified in these regulations may be used as a basis for determining an appropriate minimum age limit for measuring the economically active population.

In other countries the minimum age limit should be determined empirically on the basis of (i) the extent and intensity of participation in economic activities by young people, and (ii) the feasibility and cost of measuring such participation with acceptable accuracy. Some countries also determine a maximum age for inclusion in the labour force.

--The involvement in economic activities during the survey reference period: The concept of economic activity adopted by the Thirteenth International Conference of Labour Statisticians (1982) is defined in terms of production of goods and services as set forth by the United Nations System of National Accounts, (revised in 1993).

-- A short reference period: For example, one week or a day.

ii) Employed population: According to the 1982 international definition of employment (ILO, 1983) the employed comprise all persons above the age specified for measuring the labour force, who were in the following categories:

--Paid employment: (i) at work: persons who, during the reference period, performed some work (at least one hour) for wage or salary, in cash or in kind; (ii) with a job but not at work: persons who, having already worked in their present job, were temporarily not at work during the reference period but had a formal attachment to their job;

--self-employment: (i) at work: persons who, during the reference period, performed some work (at least one hour) for profit or family gain, in cash or in kind; (ii) with an enterprise but not at work : persons with an enterprise, which may be a business enterprise, a farm or a service undertaking, who were temporarily not at work during the reference period for some specific reason.

iii) Unemployed population: According to the 1982 international definition of employment (ILO, 1983) the unemployed comprise all persons above the age specified for measuring the labour force, who during the survey reference period were at the same time: (i) not in paid employment or self-employment, not even for an hour; (ii) available for work; and (iii) seeking work.

(b) Measurement Methods:

--Sources may be grouped into two broad categories: (i) population censuses and household sample surveys; and (ii) various types of administrative records, such as employment exchange registers, unemployment insurance records or social security files, which cover different segments of the target population (numerator of the indicator) through different conceptual frameworks.

Estimates according to the international standards can in practice be made most reliably on the basis of data collected through household surveys and population censuses. Some of the criteria specified in the international standards can only be implemented precisely through personal interviews. This is the only data source which, on a regular basis and with an appropriate survey design, can cover virtually the entire population of a country, all branches of economic activity, sectors of the economy, types of activity status and categories of workers and which allow joint, mutually exclusive measurement of the employed, unemployed and economically inactive.

--The one hour criterion is necessary to cover all regular and irregular types of employment that may exist in a given country; to have the total employment corresponding to aggregate production; and to justify the international definition of unemployment as a total lack of work, so that the two components of the labour force are mutually exclusive categories.

--Temporary absence from work is a notion which refers to situations in which a period of work is interrupted by a period of absence, i.e. persons have already worked at their current activity and are expected to return to their work after the period of absence.

For paid employment, temporary absence from work is ascertained on the basis of the concept of formal job attachment according to one or more of the following criteria: continued receipt of wage or salary; an assurance of a return to work following the end of the contingency, or an agreement as to the date of return; the elapsed duration of absence from the job which, wherever relevant, may be that duration for which workers can receive compensation benefits without obligation to accept other jobs.

For self-employment, the concept of temporary absence from work is based on two criteria: the continued existence of the enterprise and the duration of absence.

--Availability for work means that, given a work opportunity, a person should be able and ready to work during the survey reference period. In practice, many countries prefer to use a slightly longer reference period for availability (not everyone who is seeking work can be expected to take up a job immediately one is offered).

--Seeking work means having taken specific active steps in a specified recent period to seek paid employment or self-employment. This specified period may be longer than the survey reference period (e.g. one month or the four weeks before it) to take account of the time-lags which often follow initial steps to obtain work, and during which jobseekers may not take any other initiatives to find work.

The 1982 international standards introduced a provision which allows for the relaxation of the seeking work criterion in situations where the conventional means of seeking work are of limited relevance, where the labour market is largely unorganised or of limited scope, where labour absorption is at the time inadequate, or where the labour force is largely self-employed.

--Particular groups: (i) Future starts i.e. persons who have made arrangements to take up paid employment or to undertake self-employment activity at a date subsequent to the reference period, if currently available for work, are to be considered as unemployed whether or not they continue to seek work. (ii) Lay-offs without formal job attachment but seeking and currently available for work are to be classified as unemployed. (iii) Students seeking and available for work are unemployed (the availability of full-time students seeking full-time work, however, may be questionable). (iv) Persons seeking and available for apprenticeship are to be classified as unemployed if the apprenticeship is an economic activity in the sense of SNA. (v) Beneficiaries of employment creation schemes are unemployed if the training does not take place within the context of an enterprise nor is associated with the productive activities of the enterprise, and no formal job attachment exists; but there is a definite commitment to employment after the end of the training.

(c) The Indicator in the DSR Framework: In the DSR framework the unemployment rate (%) has been put into the Driving Force indicators category.

(d) Limitations of the Indicator: The concept of poverty refers to a long lasting situation while the number of unemployed can change very fast depending of various short term circumstances. Therefore, it may be interesting to use the concept of usual unemployment and usual economically active population instead of current unemployment and labour force. The difference is that the survey reference period is a long one (e.g. one year) and that a person is to be classified in one category (employed, unemployed or inactive) according to the category in which he or she is classifiable for the greatest amount of time.

National capacity to collect data related to unemployment varies considerably. There are often severe problems with data quality. In addition, the informal sector, and unpaid labour in, for example, households and the agricultural sector are not captured by this indicator.

(e) Alternative Definitions: The unemployment rate is more meaningful when shown by age, sex and other relevant variables such as the educational level, previous work experience etc.

5. Assessment of the Availability of Data from National and International Sources

(a) Data Needed to Compile the Indicator: Labour force (total number of persons) and total number of unemployed persons, derived from the same survey.

(b) Data Availability: The availability of the rate of unemployment in recent years (1992, 1993 or 1994) is ascertained for 80 countries. The sources are labour force surveys or general household surveys for 57 countries (3 do not give the distribution by gender; 15 also use employment office statistics of which 13 provide the distribution by gender); employment office statistics exclusively for 18 countries (5 do not give the distribution by gender); and official estimates for 4 countries (3 give the distribution by gender).

(c) Data Sources: See section 7i below.

6. Agencies Involved in the Development of the Indicator

The lead agency involved is the International Labour Office (ILO) of the United Nations, located in Geneva. The contact point is the Focal Point for Environment and Sustainable Development, ILO; fax no. (41-22) 798 8685.

7. Further Information

(a) Data:

Yearbook of Labour Statistics, ILO, Geneva;

Bulletin of Labour Statistics (quarterly) and its Supplement (January/February, April/May, July/August and October/November), ILO, Geneva;

Statistical yearbooks and other publications issued by the national statistical offices.

(b) Methodology:

Surveys of Economically Active Population, Employment, Unemployment and Underemployment -An ILO Manual on Concepts and Methods, ILO, Geneva, 1992.

Sources and Methods: Labour Statistics, Volumes 3 and 5, ILO, Geneva, 1991 and 1990, currently updated.

System of National Accounts 1993, Commission of the European Communities, International Monetary Fund, Organisation for Economic Co-operation and Development, United Nations, World Bank, Brussels/Luxembourg, New York, Paris, Washington, D.C., 1993;

Current international recommendations on labour statistics, ILO, Geneva, 1988. See particularly the Resolution Concerning Statistics of the Economically Active Population, Employment, Unemployment and Underemployment, adopted by the Thirteenth International Conference of Labour Statisticians (October 1982).

(c) International Conventions and Recommendations:

Labour Statistics Convention (No. 160) and Recommendation (No. 170), 1985.

HEAD COUNT INDEX OF POVERTY
Social	Chapter 3	State

1. Indicator

(a) Name: Head Count Index of Poverty.

(b) Brief Definition: The proportion of the population with a standard of living below the poverty line.

(c) Unit of Measurement: %.

2. Placement in the Framework

(a) Agenda 21: Chapter 3: Combating Poverty.

(b) Type of Indicator: State.

3. Significance (Policy Relevance)

(a) Purpose: The most important purpose of a poverty measure is to enable poverty comparisons. These are required for an overall assessment of a country's progress in poverty alleviation and/or the evaluation of specific policies or projects. An important case of a poverty comparison is the poverty profile which shows how the aggregate poverty measure can be decomposed into poverty measures for various sub-groups of the population, such as by region of residence, employment sector, education level, or ethnic group. A good poverty profile can help reveal a number of aspects of poverty-reduction policies, such as the regional or sectoral priorities for public spending. Poverty comparisons are also made over time, in assessing overall performance from the point of view of the poor.

(b) Relevance to Sustainable/Unsustainable Development: Measures of poverty are a very significant consideration of sustainable development. The eradication of poverty remains a major challenge for policy decision makers. Furthermore, an integrative viewpoint which simultaneously takes account of development issues, resource use and environmental quality, and human welfare must be taken if sustainable progress is to be achieved.

The Head Count Index of poverty captures the prevalence of poverty by measuring the proportion of population for whom consumption (or any other suitable measure of living standard) is below the poverty line. An increase in this indicator implies a worsening of the poverty situation with a greater proportion of the population falling below the poverty line.

(c) Linkages to Other Indicators: In general, this indicator is linked to many other sustainable development measures, for example, net migration rate, adult literacy rate, Gross Domestic Product per capita, and population living below the poverty line in dryland areas. In particular, the Head Count Index is closely associated to the Poverty Gap Index and the Squared Poverty Gap Index which capture successively more detailed aspects of the poverty situation. The Head Count Index measures how widespread poverty is, the Poverty Gap Index measures how poor the poor are, and the Squared Poverty Gap Index measures the severity of poverty by giving more weight to the poorest of the poor.

(d) Targets: Not available.

(e) International Conventions and Agreements: Not available.

4. Methodological Description and Underlying Definitions

(a) Underlying Definitions and Concepts: A poverty measure is a summary statistic on the economic welfare of the poor in a society. There is no one universally accepted single measure of poverty. A number of different approaches exist (see, for example, the methodology sheets for the Poverty Gap Index and the Squared Poverty Gap Index). This methodology sheet guides the reader along certain key issues, such as the different approaches to measuring individual welfare, without prescribing decisions. Consequently, it is directed at comparability over time within a given country, as it helps national practitioners specify poverty indicators that match their specific situation and preferred approach. However, this is at the expense of international comparability.

To compute poverty measures, the following questions related to identifying and defining the poor must be addressed first:

i) How do we measure an individual's economic welfare?

ii) At what level of measured welfare is a person considered poor?

(b) Measurement Methods: The Head Count Index (H) is the proportion of the population whose economic welfare (y) is less than the poverty line (z). If q people are deemed to be poor in a population of size n then H=q/n. For computing the Head Count Index, estimates of individual economic welfare and the poverty line are required.

i) Measuring Individual Welfare: There are a number of different approaches to measuring welfare. The approaches differ in terms of the importance attached to the individual's own judgment of well-being versus a concept of welfare decided upon by somebody else. The former would focus on measuring an individual's consumption of a bundle of goods and services. An example of the latter would be defining welfare by the level of nutritional intake, even though people do not live on food alone, or make food choices solely on the basis of nutrition. Approaches in practice also differ according to how difficult it is to obtain certain types of data in specific settings.

Typically one finds that poverty comparisons in developing countries put a high weight on nutritional attainments, consistent with the behaviour of poor people in a specific society. A comprehensive measure of consumption (for example, total expenditure on all goods and services consumed, including non-market goods, such as consumption from a farmer's own product) has been more popular than using current income in the development literature. This is due in part to the fact that incomes are harder to measure accurately. Current consumption is also likely to give a better indication than current income of a household's typical, long-term, economic welfare; income may fluctuate greatly over time, particularly in rural economies (see Ravallion reference in section 7a below).

The following methods can be used for measuring individual standards of living:

--Consumption per equivalent male adult: Since households differ in size and composition, a simple comparison of aggregate household consumption can be misleading about the welfare of individual members of the household. Therefore, for any given household, an equivalence scale is used to approximate the number of single adults, based on observed consumption behaviour. There are a number of value judgments embedded in this practice; for example, differences in needs are reflected in differences in consumption. Adult females and children are assigned a male equivalence of less than one since they typically consume less; however, that may not mean that they have lower "needs" but rather have less power within the household. The existence of size economies in consumption may also mean that two people can live more cheaply together than apart (for a further discussion of these issues, see Ravallion reference in section 7a below).

--Undernutrition: This is a distinct concept, although closely associated with poverty. Undernutrition can be viewed as a specific type of poverty, namely food energy poverty. There are a number of arguments for and against using this as a measure of well-being. A practical advantage is that this measure does not have to be adjusted for inflation and would not be constrained by any inadequacy of price data. Measures of child nutritional status can help capture aspects of welfare, such as distribution within the household which are not adequately reflected in other indicators. However, nutrition is not the only aspect that matters to the well-being of people, including the poor. Thus, poverty comparisons based solely on nutrition alone may be limited and deceptive.

ii) Defining the Poverty Line: In practice, there are a number of alternative approaches to defining poverty lines:

--Absolute poverty lines: An absolute poverty line is one which is fixed in terms of the living standard indicator being used (consumption, nutrition). It is fixed over the entire domain of comparison, that is, a poverty line which assures the same level of economic welfare would be used to measure and compare poverty across provinces or different situations. The poverty line may still vary, but only so as to measure the differences in the cost of a given level of welfare. Absolute poverty lines are more common in developing country literature.

The most common approach to defining absolute poverty lines is to estimate the cost in each region or at each date of a certain bundle of goods necessary to attain basic consumption needs (this is called the basic needs approach). The most important component of basic needs is a recommended food energy intake, supplemented by essential non-food goods. To measure food energy requirements, one needs to make an assumption about activity levels which in turn determine energy requirements to maintain the body's metabolic rate at rest. Once the food energy intake has been determined, and its cost has been calculated, an allowance for non-food spending can be added by finding the total expenditure level at which a person typically attains the food component of the poverty line. An alternative (lower) allowance for non-food goods is to use the average non-food spending of people who can just afford the food component of the poverty line: it can be argued that this is a reasonable lower bound for the non-food component of the poverty line (see Ravallion reference in section 7a below).

--Relative poverty lines: These have dominated developed country literature where many studies have used a poverty line which is set at, for example, 50% of the national mean income. When the poverty line is fixed as a proportion of the national mean, if all incomes increase by the same proportion, there would be no change in relative inequalities and the poverty line would simply increase by the same proportion; that is, the poverty measure will not change. This can make such poverty lines deceptive for some purposes, such as assessing whether poor people are better or worse off.

A cross-country comparison of 36 countries, both developed and developing, revealed that real poverty lines will tend to increase with economic growth, but they will do so slowly for the poorest countries. Therefore, the concept of absolute poverty appears to be more relevant to low income countries, while relative poverty is of more relevance to high income countries.

(c) The Indicator in the DSR Framework: In the DSR Framework, this indicator represents a measure of the State of poverty.

(d) Limitations of the Indicator: In practice, most applications in developing countries have used consumption per person. This probably overstates the extent to which poverty is associated with larger family sizes. But other aspects of the poverty profile (such as assessments of the regional or sectoral poverty profiles) tend to be more robust as a measurement choice.

It is important to note that a certain amount of arbitrariness and value judgement are unavoidable in defining individual welfare and any poverty line. Therefore, the overall assessment of the poverty situation should pay particularly attention to how the choices made affect poverty comparisons, since these are generally what matter most to policy implications. An increasingly common practice is to recalculate the poverty measures using various poverty lines, and to test whether the qualitative poverty comparisons are robust to the choice.

It should be noted that there are several comparability problems across countries in the use of data from household surveys (see section 5 below). In addition, definitions of poverty are lacking in some countries or vary from country to country. These problems are diminishing over time as survey methodologies are improving and becoming more standardized, but they remain.

(e) Alternative Definitions: The Poverty Gap Index and the Squared Poverty Gap Index represent alternative definitions for a poverty indicator (see section 3c above and the relevant methodology sheets for these indicators).

5. Assessment of the Availability of Data from International and National Sources

The most important source of data on living standards is household surveys. The results of these surveys can be obtained from government statistical agencies, often via published reports. About two thirds of the developing countries have done sample household surveys which are representative nationally, and some (but certainly not all) of these provide high-quality data on living standards.

Data can also be obtained from international agencies such as The World Bank (mostly data for low and middle income countries emerging from the Living Standards Measurement Study and Social Dimensions of Adjustment Project for Sub Saharan Africa). Data for developed countries can be obtained from the Statistical Office of the European Union (Eurostat), the Luxembourg Income Study, or the Organisation for Economic Co-operation and Development (OECD).

6. Agencies Involved in the Development of the Indicator

The lead agency involved is The World Bank (WB). The contact point is the Chief, Indicators and Environmental Valuation Unit, Environment Department, WB; fax no. (1-202) 477 0968.

7. Further Information

(a) Further Readings:

Ravallion, M. Poverty Comparisons. Fundamentals in Pure and Applied Economics, Volume 56, Harwood Academic Press, Switzerland. 1994.

POVERTY GAP INDEX
Social	Chapter 3	State

1. Indicator

(a) Name: Poverty Gap Index.

(b) Brief Definition: The mean over the population of the proportionate poverty gap, where the poverty gap is given by the distance of the poor below the poverty line, as a proportion of the line. The non-poor are counted as having zero poverty gap.

(c) Unit of Measurement: Fraction bounded by 0 and the Head Count Index.

2. Placement in the Framework

(a) Agenda 21: Chapter 3: Combating Poverty.

(b) Type of Indicator: State.

3. Significance (Policy Relevance)

(a) Purpose: The most important purpose of a poverty measure is to enable poverty comparisons. These are required for an overall assessment of a country's progress in poverty alleviation and/or the evaluation of specific policies or projects. An important case of a poverty comparison is the poverty profile which shows how the aggregate poverty measure can be decomposed into poverty measures for various sub-groups of the population, such as by region of residence, employment sector, education level, or ethnic group. A good poverty profile can help reveal a number of aspects of poverty-reduction policies, such as the regional or sectoral priorities for public spending. Poverty comparisons are also made over time, in assessing overall performance from the point of view of the poor.

(b) Relevance to Sustainable/Unsustainable Development: Measures of poverty are a very significant consideration of sustainable development. The eradication of poverty remains a major challenge for policy decision makers. Furthermore, an integrative viewpoint which simultaneously takes account of development issues, resource use and environmental quality, and human welfare must be taken if sustainable progress is to be achieved.

The Poverty Gap Index measures the depth of poverty in a country or region, based on the aggregate poverty deficit of the poor relative to the poverty line. Since the Head Count Index (see section 3c below) is not sensitive to changes in the status of those already below the poverty line, it is inadequate in assessing the impact of specific policies on the poor. On the other hand, the Poverty Gap Index increases with the distance of the poor below the poverty line, and thus gives a good indication of the depth of poverty. A decline in the Poverty Gap Index reflects an improvement in the current situation.

(c) Linkages to Other Indicators: In general, this indicator is linked to many other sustainable development measures, for example, net migration rate, adult literacy rate, Gross Domestic Product per capita, and population living below the poverty line in dryland areas. More specifically, the poverty measures discussed in this and two other methodology sheets; namely the Head Count Index, the Poverty Gap Index, and the Squared Poverty Gap Index; capture successively more detailed aspects of the poverty situation. The Head Count Index measures how widespread poverty is, the Poverty Gap Index measures how poor the poor are, and the Squared Poverty Gap Index measures the severity of poverty by giving more weight to the poorest of the poor.

(d) Targets: Not available.

(e) International Conventions and Agreements: Not available.

4. Methodological Description and Underlying Definitions

(a) Underlying Definitions and Concepts: A poverty measure is a summary statistic on the economic welfare of the poor in a society. There is no one universally accepted single measure of poverty. A number of different approaches exist (see, for example, the methodology sheets for the Poverty Gap Index and the Squared Poverty Gap Index). This methodology sheet guides the reader along certain key issues, such as the different approaches to measuring individual welfare, without prescribing decisions. Consequently, it is directed at comparability over time within a given country, as it helps national practitioners specify poverty indicators that match their specific situation and preferred approach. However, this is at the expense of international comparability.

To compute poverty measures, the following questions related to identifying and defining the poor must be addressed first:

i) How do we measure an individual's economic welfare?

ii) At what level of measured welfare is a person considered poor?

(b) Measurement Methods: The Poverty Gap Index is the mean across the population of a household poverty measure (weighted by household-size). The Index takes the value zero if the average economic welfare (for example, consumption) is above the poverty line, and is measured by the function 1-y/z if it is at or below the line, where z is the poverty line and y denotes the mean consumption of the poor. For computing the Poverty Gap Index, estimates of individual economic welfare (y), and the poverty line (z) are required.

i) Measuring Individual Welfare: There are a number of different approaches to measuring welfare. The approaches differ in terms of the importance attached to the individual's own judgment of well-being versus a concept of welfare decided upon by somebody else. The former would focus on measuring an individual's consumption of a bundle of goods and services. An example of the latter would be defining welfare by the level of nutritional intake, even though people do not live on food alone, or make food choices solely on the basis of nutrition. Approaches in practice also differ according to how difficult it is to obtain certain sorts of data in specific settings.

Typically one finds that poverty comparisons in developing countries put a high weight on nutritional attainments, consistent with the behaviour of poor people in a specific society. A comprehensive measure of consumption (for example, total expenditure on all goods and services consumed, including non-market goods, such as consumption from a farmer's own product) has been more popular than using current income in the development literature. This is due in part to the fact that incomes are harder to measure accurately. Current consumption is also likely to give a better indication than current income of a household's typical, long-term, economic welfare; income may fluctuate greatly over time, particularly in rural economies (see Ravallion reference in section 7a below).

The following methods can be used for measuring individual standards of living:

--Consumption per equivalent male adult: Since households differ in size and composition, a simple comparison of aggregate household consumption can be misleading about the welfare of individual members of the household. Therefore, for any given household, an equivalence scale is used to approximate the number of single adults, based on observed consumption behaviour. There are a number of value judgments embedded in this practice; for example, differences in needs are reflected in differences in consumption. Adult females and children are assigned a male equivalence of less than one since they typically consume less; however, that may not mean that they have lower "needs" but rather have less power within the household. The existence of size economies in consumption may also mean that two people can live more cheaply together than apart (for a further discussion of these issues, see Ravallion reference in section 7a below).

--Undernutrition: This is a distinct concept, although closely associated with poverty. Undernutrition can be viewed as a specific type of poverty, namely food energy poverty. There are a number of arguments for and against using this as a measure of well-being. A practical advantage is that this measure does not have to be adjusted for inflation and would not be constrained by any inadequacy of price data. Measures of child nutritional status can help capture aspects of welfare, such as distribution within the household which are not adequately reflected in other indicators. However, nutrition is not the only aspect that matters to the well-being of people, including the poor. Thus, poverty comparisons based solely on nutrition alone may be limited and deceptive.

ii) Defining the Poverty Line: In practice, there are a number of alternative approaches to defining poverty lines:

--Absolute poverty lines: An absolute poverty line is one which is fixed in terms of the living standard indicator being used (consumption, nutrition). It is fixed over the entire domain of comparison, that is, a poverty line which assures the same level of economic welfare would be used to measure and compare poverty across provinces or different situations. The poverty line may still vary, but only so as to measure the differences in the cost of a given level of welfare. Absolute poverty lines are more common in developing country literature.

The most common approach to defining absolute poverty lines is to estimate the cost in each region or at each date of a certain bundle of goods necessary to attain basic consumption needs (this is called the basic needs approach). The most important component of basic needs is a recommended food energy intake, supplemented by essential non-food goods. To measure food energy requirements, one needs to make an assumption about activity levels which in turn determine energy requirements to maintain the body's metabolic rate at rest. Once the food energy intake has been determined, and its cost has been calculated, an allowance for non-food spending can be added by finding the total expenditure level at which a person typically attains the food component of the poverty line. An alternative (lower) allowance for non-food goods is to use the average non-food spending of people who can just afford the food component of the poverty line: it can be argued that this is a reasonable lower bound for the non-food component of the poverty line (see Ravallion reference in section 7a below).

--Relative poverty lines: These have dominated developed country literature where many studies have used a poverty line which is set at, for example, 50% of the national mean income. When the poverty line is fixed as a proportion of the national mean, if all incomes increase by the same proportion, there would be no change in relative inequalities and the poverty line would simply increase by the same proportion; that is, the poverty measure will not change. This can make such poverty lines deceptive for some purposes, such as assessing whether poor people are better or worse off.

A cross-country comparison of 36 countries, both developed and developing, revealed that real poverty lines will tend to increase with economic growth, but they will do so slowly for the poorest countries. Therefore, the concept of absolute poverty appears to be more relevant to low income countries, while relative poverty is of more relevance to high income countries.

(c) The Indicator in the DSR Framework: In the DSR Framework, this indicator represents a measure of the State of poverty.

(d) Limitations of the Indicator: In practice, most applications in developing countries have used consumption per person. This probably overstates the extent to which poverty is associated with larger family sizes. But other aspects of the poverty profile (such as assessments of the regional or sectoral poverty profiles) tend to be more robust as a measurement choice.

It is important to note that a certain amount of arbitrariness and value judgement are unavoidable in defining individual welfare and any poverty line. Therefore, the overall assessment of the poverty situation should pay particularly attention to how the choices made affect poverty comparisons, since these are generally what matter most to policy implications. An increasingly common practice is to recalculate the poverty measures using various poverty lines, and to test whether the qualitative poverty comparisons are robust to the choice.

It should be noted that there are several comparability problems across countries in the use of data from household surveys (see section 5 below). In addition, definitions of poverty are lacking in some countries or vary from country to country. These problems are diminishing over time as survey methodologies are improving and becoming more standardized, but they remain.

(e) Alternative Definitions: The Head Count Index and the Squared Poverty Gap Index represent alternative definitions for a poverty indicator (see section 3c above and the relevant methodology sheets for these indicators).

5. Assessment of the Availability of Data from International and National Sources

The most important source of data on living standards is household surveys. The results of these surveys can be obtained from government statistical agencies, often via published reports. About two thirds of the developing countries have done sample household surveys which are representative nationally, and some (but certainly not all) of these provide high-quality data on living standards.

Data can also be obtained from international agencies such as The World Bank (mostly data for low and middle income countries emerging from the Living Standards Measurement Study and Social Dimensions of Adjustment Project for Sub Saharan Africa). Data for developed countries can be obtained from the Statistical Office of the European Union (Eurostat), the Luxembourg Income Study, or the Organisation for Economic Co-operation and Development (OECD).

6. Agencies Involved in the Development of the Indicator

The lead agency involved is The World Bank (WB). The contact point is the Chief, Indicators and Environmental Valuation Unit, Environment Department, WB; fax no. (1-202) 477 0968.

7. Further Information

(a) Further Readings:

Ravallion, M. Poverty Comparisons. Fundamentals in Pure and Applied Economics, Volume 56, Harwood Academic Press, Switzerland. 1994.

 

SQUARED POVERTY GAP INDEX
Social	Chapter 3	State

1. Indicator

(a) Name: Squared Poverty Gap Index.

(b) Brief Definition: The mean of the squared proportionate poverty gap.

(c) Unit of Measurement: Fraction bounded by 0 and the Poverty Gap Index.

2. Placement in the Framework

(a) Agenda 21: Chapter 3: Combating Poverty.

(b) Type of Indicator: State.

3. Significance (Policy Relevance)

(a) Purpose: The most important purpose of a poverty measure is to enable poverty comparisons. These are required for an overall assessment of a country's progress in poverty alleviation and/or the evaluation of specific policies or projects. An important case of a poverty comparison is the poverty profile which shows how the aggregate poverty measure can be decomposed into poverty measures for various sub-groups of the population, such as by region of residence, employment sector, education level, or ethnic group. A good poverty profile can help reveal a number of aspects of poverty-reduction policies, such as the regional or sectoral priorities for public spending. Poverty comparisons are also made over time, in assessing overall performance from the point of view of the poor.

(b) Relevance to Sustainable/Unsustainable Development: Measures of poverty are a very significant consideration of sustainable development. The eradication of poverty remains a major challenge for policy decision makers. Furthermore, an integrative viewpoint which simultaneously takes account of development issues, resource use and environmental quality, and human welfare must be taken if sustainable progress is to be achieved.

In addition to the Head Count and Poverty Gap Indices, a third measure which better reflects changes in the severity of poverty is the Squared Poverty Gap Index. This is defined similar to the Poverty Gap Index except that the poverty gaps are squared, thus giving the highest weighting to the largest poverty gap. The need for this Index arises because the Poverty Gap Index may not adequately capture concerns over distribution changes within the poor. For example, if a policy resulted in money transfer from someone just below the poverty line to the poorest person, the Squared Poverty Gap Index will reflect this change, while the Poverty Gap Index will not.

(c) Linkages to Other Indicators: In general, this indicator is linked to many other sustainable development measures, for example, net migration rate, adult literacy rate, Gross Domestic Product per capita, and population living below the poverty line in dryland areas. More specifically, the poverty measures discussed in this and two other methodology sheets; namely the Head Count Index, the Poverty Gap Index, and the Squared Poverty Gap Index; capture successively more detailed aspects of the poverty situation. The Head Count Index measures how widespread poverty is, the Poverty Gap Index measures how poor the poor are, and the Squared Poverty Gap Index measures the severity of poverty by giving more weight to the poorest of the poor.

(d) Targets: Not available.

(e) International Conventions and Agreements: Not available.

4. Methodological Description and Underlying Definitions

(a) Underlying Definitions and Concepts: A poverty measure is a summary statistic on the economic welfare of the poor in a society. There is no one universally accepted single measure of poverty. A number of different approaches exist (see, for example, the methodology sheets for the Poverty Gap Index and the Squared Poverty Gap Index). This methodology sheet guides the reader along certain key issues, such as the different approaches to measuring individual welfare, without prescribing decisions. Consequently, it is directed at comparability over time within a given country, as it helps national practitioners specify poverty indicators that match their specific situation and preferred approach. However, this is at the expense of international comparability.

To compute poverty measures, the following questions related to identifying and defining the poor must be addressed first:

i) How do we measure an individual's economic welfare?

ii) At what level of measured welfare is a person considered poor?

(b) Measurement Methods: The Squared Poverty Gap Index is the mean of a measure (weighted by household-size) that is zero if the household's welfare (y) is above the poverty line (z), and represented by the squared poverty gap, that is [1-y/z] x [1-y/z], if y is at or below z.

For computing the above indicator, estimates of individual economic welfare (y), and the poverty line (z) are required.

i) Measuring Individual Welfare: There are a number of different approaches to measuring welfare. The approaches differ in terms of the importance attached to the individual's own judgment of well-being versus a concept of welfare decided upon by somebody else. The former would focus on measuring an individual's consumption of a bundle of goods and services. An example of the latter would be defining welfare by the level of nutritional intake, even though people do not live on food alone, or make food choices solely on the basis of nutrition. Approaches in practice also differ according to how difficult it is to obtain certain sorts of data in specific settings.

Typically one finds that poverty comparisons in developing countries put a high weight on nutritional attainments, consistent with the behaviour of poor people in a specific society. A comprehensive measure of consumption (for example, total expenditure on all goods and services consumed, including non-market goods, such as consumption from a farmer's own product) has been more popular than using current income in the development literature. This is due in part to the fact that incomes are harder to measure accurately. Current consumption is also likely to give a better indication than current income of a household's typical, long-term, economic welfare; income may fluctuate greatly over time, particularly in rural economies (see Ravallion reference in section 7a below).

The following methods can be used for measuring individual standards of living:

--Consumption per equivalent male adult: Since households differ in size and composition, a simple comparison of aggregate household consumption can be misleading about the welfare of individual members of the household. Therefore, for any given household, an equivalence scale is used to approximate the number of single adults, based on observed consumption behaviour. There are a number of value judgments embedded in this practice; for example, differences in needs are reflected in differences in consumption. Adult females and children are assigned a male equivalence of less than one since they typically consume less; however, that may not mean that they have lower "needs" but rather have less power within the household. The existence of size economies in consumption may also mean that two people can live more cheaply together than apart (for a further discussion of these issues, see Ravallion reference in section 7a below).

--Undernutrition: This is a distinct concept, although closely associated with poverty. Undernutrition can be viewed as a specific type of poverty, namely food energy poverty. There are a number of arguments for and against using this as a measure of well-being. A practical advantage is that this measure does not have to be adjusted for inflation and would not be constrained by any inadequacy of price data. Measures of child nutritional status can help capture aspects of welfare, such as distribution within the household which are not adequately reflected in other indicators. However, nutrition is not the only aspect that matters to the well-being of people, including the poor. Thus, poverty comparisons based solely on nutrition alone may be limited and deceptive.

ii) Defining the Poverty Line: In practice, there are a number of alternative approaches to defining poverty lines:

--Absolute poverty lines: An absolute poverty line is one which is fixed in terms of the living standard indicator being used (consumption, nutrition). It is fixed over the entire domain of comparison, that is, a poverty line which assures the same level of economic welfare would be used to measure and compare poverty across provinces or different situations. The poverty line may still vary, but only so as to measure the differences in the cost of a given level of welfare. Absolute poverty lines are more common in developing country literature.

The most common approach to defining absolute poverty lines is to estimate the cost in each region or at each date of a certain bundle of goods necessary to attain basic consumption needs (this is called the basic needs approach). The most important component of basic needs is a recommended food energy intake, supplemented by essential non-food goods. To measure food energy requirements, one needs to make an assumption about activity levels which in turn determine energy requirements to maintain the body's metabolic rate at rest. Once the food energy intake has been determined, and its cost has been calculated, an allowance for non-food spending can be added by finding the total expenditure level at which a person typically attains the food component of the poverty line. An alternative (lower) allowance for non-food goods is to use the average non-food spending of people who can just afford the food component of the poverty line: it can be argued that this is a reasonable lower bound for the non-food component of the poverty line (see Ravallion reference in section 7a below).

--Relative poverty lines: These have dominated developed country literature where many studies have used a poverty line which is set at, for example, 50% of the national mean income. When the poverty line is fixed as a proportion of the national mean, if all incomes increase by the same proportion, there would be no change in relative inequalities and the poverty line would simply increase by the same proportion; that is, the poverty measure will not change. This can make such poverty lines deceptive for some purposes, such as assessing whether poor people are better or worse off.

A cross-country comparison of 36 countries, both developed and developing, revealed that real poverty lines will tend to increase with economic growth, but they will do so slowly for the poorest countries. Therefore, the concept of absolute poverty appears to be more relevant to low income countries, while relative poverty is of more relevance to high income countries.

(c) The Indicator in the DSR Framework: In the DSR Framework, this indicator represents a measure of the State of poverty.

(d) Limitations of the Indicator: In practice, most applications in developing countries have used consumption per person. This probably overstates the extent to which poverty is associated with larger family sizes. But other aspects of the poverty profile (such as assessments of the regional or sectoral poverty profiles) tend to be more robust as a measurement choice.

It is important to note that a certain amount of arbitrariness and value judgement are unavoidable in defining individual welfare and any poverty line. Therefore, the overall assessment of the poverty situation should pay particularly attention to how the choices made affect poverty comparisons, since these are generally what matter most to policy implications. An increasingly common practice is to recalculate the poverty measures using various poverty lines, and to test whether the qualitative poverty comparisons are robust to the choice.

It should be noted that there are several comparability problems across countries in the use of data from household surveys (see section 5 below). In addition, definitions of poverty are lacking in some countries or vary from country to country. These problems are diminishing over time as survey methodologies are improving and becoming more standardized, but they remain.

(e) Alternative Definitions: The Head Count Index and the Poverty Gap Index represent alternative definitions for a poverty indicator (see section 3c above and the relevant methodology sheets for these indicators).

5. Assessment of the Availability of Data from International and National Sources

The most important source of data on living standards is household surveys. The results of these surveys can be obtained from government statistical agencies, often via published reports. About two thirds of the developing countries have done sample household surveys which are representative nationally, and some (but certainly not all) of these provide high-quality data on living standards.

Data can also be obtained from international agencies such as The World Bank (mostly data for low and middle income countries emerging from the Living Standards Measurement Study and Social Dimensions of Adjustment Project for Sub Saharan Africa). Data for developed countries can be obtained from the Statistical Office of the European Union (Eurostat), the Luxembourg Income Study, or the Organisation for Economic Co-operation and Development (OECD).

6. Agencies Involved in the Development of the Indicator

The lead agency involved is The World Bank (WB). The contact point is the Chief, Indicators and Environmental Valuation Unit, Environment Department, WB; fax no. (1-202) 477 0968.

7. Further Information

(a) Further Readings:

Ravallion, M. Poverty Comparisons. Fundamentals in Pure and Applied Economics, Volume 56, Harwood Academic Press, Switzerland. 1994.

GINI INDEX OF INCOME INEQUALITY
Social	Chapter 3	State

1. Indicator

(a) Name: Gini Index of Income Inequality.

(b) Brief Definition: A summary measure of the extent to which the actual distribution of income, consumption expenditure, or a related variable, differs from a hypothetical distribution in which each person receives an identical share.

(c) Unit of Measurement: A dimensionless index scaled to vary from a minimum of zero to a maximum of one; zero representing no inequality and one representing the maximum possible degree of inequality.

2. Placement in the Framework

(a) Agenda 21: Chapter 3: Combating Poverty.

(b) Type of Indicator: State.

3. Significance (Policy Relevance)

(a) Purpose: The Gini Index provides a measure of income or resource inequality within a population. It is the most popular measure of income inequality.

(b) Relevance to Sustainable/Unsustainable Development: This indicator is particularly relevant to the equity component of sustainable development. Income or resource distribution have direct consequences on the poverty rate of a country or region. Broadly speaking, average material welfare can be defined by the per capita Gross Domestic Product (GDP). However, statistical averages can mask the diversity that exists within any country. Therefore, from a sustainable development perspective, it is informative to examine income and wealth distribution throughout a population. A country can, for example, have a high per capita GDP figure, but its income distribution so skewed that the majority of people are poor. This indicator is useful both to measure changes in income inequality over time and for international comparisons.

(c) Linkages to Other Indicators: This indicator is linked to several other sustainable development measures, including the poverty indicators, women per 100 men in the labour force, GDP per capita, population dynamics in mountain areas, and sustainable development strategies.

(d) Targets: Not available.

(e) International Conventions and Agreements: Not available.

4. Methodological Description and Underlying Definitions

(a) Underlying Definitions and Concepts: The concept and definition of this indicator are well understood and readily available. The Gini Index measures the area between the Lorenz Curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line of perfect equality (see Figure 1 in section 4b below). The Gini Index is defined as one half of the average value of the absolute differences between all possible pairs of "incomes".

(b) Measurement Methods: The Lorenz Curve plots the cumulative percentages of total income received (on the vertical axis) against the cumulative percentage of recipients, starting with the poorest individual or household (see Figure 1).

Figure 1: The Lorenz Curve and Gini Index of Income

There are a number of choices about data which can influence the precise value of the Gini Index obtained. For example, a Gini Index for consumption expenditure will typically be lower in value than one for income, even within the same population. This is because households smooth their consumption over time in response to income changes. At any one date, there will be some households with unusually low incomes and others with unusually high ones; with some opportunities for saving and/or borrowing. Thus, household consumption will be less unequal.

It is important how "income" is measured, for example whether it is total household income or per capita household income, or income per equivalent adult. In addition, it matters whether or not the incomes are weighted by household size, since households with lower income per person tend to be larger. Thus, the income share of the poorest 20% of households will be higher than the income share of the poorest 20% of persons.

The World Bank, for example, prefers to weight by household size and calculate the shares held by persons rather than households for most purposes. As a general rule, the Bank also considers consumption expenditure to be the more reliable indicator of welfare than income, which can be excessively variable over time, and is also more difficult to measure accurately, particularly in developing countries. Looking at the sample of 67 low and middle income countries for which Gini indices of income are reported in the World Bank's draft report World Development Indicators, this coefficient ranges from a low of 22% to a high value of 64%.

There are a number of ways of estimating the Gini Index of income, and the choice depends in part on the type of data available. Distributional data are often available in grouped form, such as the income share of the lowest decile of households, where households are ranked by income per person. To estimate the Lorenz Curve, and thus the Gini Index, from such data, the World Bank often uses a software package called POVCAL. Having specified the type of data, the program calculates both the General Quadratic specification for the Lorenz Curve and the Beta specification. It then calculates the Gini Index and various other statistics, including poverty measures for each Lorenz Curve. The program also advises which is the better specification for the Lorenz Curve for the specific data used.

(c) The Indicator in the DSR Framework: In the DSR Framework, this indicator represents a measure of the State of income inequality.

(d) Limitations of the Indicator: The Gini Index is not a very discriminating indicator. Two very different distributions--one having more inequality amongst the poor, the other having more amongst the rich--can have exactly the same Gini Index.

Measurement errors in data sets are thought to be greater for incomes compared to consumption expenditure, which will add to measured inequality (see section 4b above). Differences between countries in the measured Gini index may thus reflect in part differences in the welfare measures used.

While the Gini Index of income (in common with most other measures of inequality) captures information on the pattern of relative levels of wellbeing in the population, it is independent of any considerations of absolute living standards. So there is nothing to guarantee that a lower Gini Index of income entails higher social welfare in any agreed sense, since the mean income may have also fallen. The Gini Index is at best a partial indicator, and other measures will be needed to complete the picture of how levels of economic welfare are evolving in a society.

It should be noted that there are several comparability problems across countries in the use of data from household surveys (see section 5 below). These problems are diminishing over time as survey methodologies are improving and becoming more standardized, but they remain.

(e) Alternative Definitions: There are many other measures of inequality, with various strengths and weaknesses. These are discussed in Sen (1973) (see section 7a below).

5. Assessment of the Availability of Data from International and National Sources

The most important source of data on living standards is household surveys. The results of these surveys can be obtained from government statistical agencies, often via published reports. About two thirds of the developing countries have done sample household surveys which are representative nationally, and some (but certainly not all) of these provide high-quality data on living standards.

Data can also be obtained from international agencies such as The World Bank (mostly data for low and middle income countries emerging from the Living Standards Measurement Study and Social Dimensions of Adjustment Project for Sub Saharan Africa). Data for developed countries can be obtained from the Statistical Office of the European Union (Eurostat), the Luxembourg Income Study, or the Organisation for Economic Co-operation and Development (OECD).

6. Agencies Involved in the Development of the Indicator

The lead agency involved is The World Bank (WB). The contact point is the Chief, Indicators and Environmental Valuation Unit, Environment Department, WB; fax no. (1-202) 477 0968.

7. Further Information

(a) Further Readings:

Chen, S., G. Datt, M. Ravallion. POVCAL: A Program for Calculating Poverty Measures from Grouped Data. Poverty and Human Resources Division, Policy Research Department, Washington DC: World Bank. 1992.

Ravallion, M., and S. Chen. What Can New Survey Data Tell Us About Recent Changes in Living Standards in Developing and Transitional Economies?. Working Paper 1. Research Project on Social and Environmental Consequences of Growth-Oriented Policies, Washington DC: World Bank.

Sen, A. On Economic Inequality. Oxford: Oxford University Press. 1973.

The World Bank. World Development Indicators. Draft Report. 1996.

 

RATIO OF AVERAGE FEMALE WAGE TO MALE WAGE
Social	Chapter 3	State

1. Indicator

(a) Name: Ratio of average female wage to male wage.

(b) Brief Definition: Obtained as the quotient of average wage rates paid to female and male employees at regular intervals for time worked or work done for particular occupations.

(c) Unit of Measurement: %.

2. Placement in Framework

(a) Agenda 21: Chapter 3: Combating Poverty

(b) Type of Indicator: State.

3. Significance (Policy Relevance)

(a) Purpose: It is important to have an assessment of remuneration offered women vis-a-vis their male counterpart to ultimately determine the level of women's participation in the economy.

(b) Relevance to Sustainable/Unsustainable Development: The lower the ratio of wages offered to women, the less the attraction for women to join the labor force, which in turn deprives the economy of a vital component of development. This disadvantage could also be attributed to inequalities in educational opportunities for women and the need for policy makers to correct this inequity. It is generally acknowledged that if women are more educated, it is likely to result in a corresponding reduction in infant mortality rates.

(c) Linkages to Other Indicators: The indicator has close linkages with the unemployment rate indicator because both deal with employment as a principal generator of production. It is also closely linked to indicators pertaining to education.

(d) Targets: Not available.

(e) International Conventions and Agreements: The resolution covering the institution of an integrated system of wages statistics, including defined earnings and wage rates, was adopted by the Twelfth International Conference of Labor Statisticians in Geneva in 1973 (see section 7 below).

4. Methodological Description and Underlying Definitions

(a) Underlying Definitions and Concepts: The UN International Labour Office (ILO) and the UN System of National Accounts (SNA) provide two sources for this section.

i) The concept of earnings, as applied in wages statistics, relate to remuneration in cash and in kind paid to employees, usually at regular intervals, for time worked; or work done together with remuneration for time not worked, such as for annual vacation, other paid leave or holidays. Wage rates, as part of earnings, include basic wages, cost-of-living allowances and other guaranteed and regularly paid allowances, but exclude overtime payments, bonuses and gratuities, family allowances and other social security payments made by employers. Ex gratia payments in kind, supplementary to normal wage rates are also excluded (ILO).

ii) Wages and salaries, as part of compensation to employees, are payable in cash or in kind and include the values of any social contributions, such as income taxes, payable by the employee even if they are actually withheld by the employer for administrative convenience or other reasons and paid directly to social insurance schemes, tax authorities, etc. on behalf of the employee. Wages and salaries in cash include payments at regular intervals, supplementary allowances payable regularly, payments to employees away from work for short periods such as holidays, and ad hoc bonuses linked to performance, commissions, gratuities and tips (SNA).

(b) Measurement Methods: The indicator is measured by taking the average wage rates per day, week or month received by female employees as a ratio of the corresponding average wage rates for males. It could be classified further according to major divisions of economic activity, for example, agriculture, mining and quarrying, etc., to facilitate measurement of sectoral impact on the development process. Similarly, breakdowns according to age classes would provide additional information related to sustainable development trends.

(c) The Indicator in the DSR Framework: This indicator deals with the participation of labor in the economic process, and stresses the importance of human activities to sustainable development. It fits ideally within the DSR Framework as a State indicator.

(d) Limitations of the Indicator: A serious limitation is the reliability and comprehensiveness of wage rate data paid to female labor. Although data is available for many countries, the quality varies significantly among countries. Wage rates determine total remuneration and measure women's contribution to total production. However, since most of the basic remuneration for women's economic and social activities remain unreported or unrecorded--and even if reported, are grossly undervalued--only imputations are possible in many countries. The indicator will be greatly influenced by the selection of wage sectors, and type and level of job. The cost of collecting the data from questionnaires and surveys can be significant.

Another limitation is that female wage rates do not tell the whole story. Wages, particularly for females, may reflect under-employment. Women, especially in developing countries, may participate in informal activities where they are not classified as wage earners. They do not receive income in the SNA sense and therefore these activities are not covered by this indicator.

(e) Alternative Indicator Definitions: An alternative indicator to the male-female wage would be the percentage contribution of women to GDP which measures activities in the production boundary that incorporate the contribution of women in the economic process as proposed in the 1993 SNA. This would include the production and processing of agricultural, dairy and fishery products and flour by milling; weaving, dress making, production of footwear, baskets, mats, etc.

5. Assessment of the Availability of Data from National and International Sources

The average wage rates paid to female and male employees provide the basic information to compile this indicator and are mainly reported by departments or ministries of labor in most countries. It is obtained either through questionnaires or surveys from the different economic sectors of the economy. Average earnings are usually derived from payroll data supplied by a sample of establishments together with data on hours of work and on employment. Occasionally, wage indices are reported in the absence of absolute wage data. In some other cases, information is compiled on the basis of social insurance statistics. The extent of data availability is published by the ILO in the Yearbook of Labor Statistics.

6. Agencies Involved in the Development of the Indicator

The International Labor Office (ILO) is the principal agency and contact point in the development of this indicator. The contact is the Focal Point for Environment and Sustainable Development; fax no. (41 22) 798 8685.

7. Further Information

The full text of the resolution listed in section 3e above can be found in Current International Recommendations on Labor Statistics (Geneva 1988).

Further information can be obtained from other ILO publications, as follows:

An Integrated System of Wages Statistics: A Manual on Methods (Geneva 1979).

Statistical Sources and Methods; Vol. 2 Employment, Wages and Hours of Work (Establishment Surveys) (Geneva 1987); Vol. 4 Employment, Unemployment, Wages and Hours of Work (Administrative Records and Related Sources) (Geneva 1989).