Slide 1

Report
EU KLEMS project on
Productivity in the European
Union
Bart van Ark
Presentation at NAWG Meeting
Luxembourg, 15 May 2007
This project is funded by the European Commission,
Research Directorate General as part of the 6th Framework
Programme, Priority 8, "Policy Support and Anticipating
Scientific and Technological Needs".
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Milestones on EU KLEMS Database
March 2006 – May 2007
End of March 2006: restricted release of preliminary analytical
database
March-September 2006: Feedback phase from NSI’s until September
2006, incl. bilateral meetings, workshops, etc.
November 2006: very restricted release of draft version of first public
release
December-January 2006: additional feedback from NSI’s and
European Commission and suggestions for statistical module (letter
Eurostat/EU KLEMS, 29 Nov 2006)
11 January: approval of first public release by EU KLEMS data
coordination group
Early March: green light from DG ECFIN and DG Research for
release at Commission premises in Brussels
Release events:
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15 March 2007: public release in Brussels in presence of DG Eurostat
and Commissioner ECFIN + website Eurostat for statistical module
19 March 2007: release event at European Central Bank
29 March 2007: release at Economic Policy Council, Brussels
What is in the March 2007 version of the
EU KLEMS Database?
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March release is analytical module of EU KLEMS (uses feedback
from NSI’s but is only research database, not official statistics)
Systematic data collection based on national accounts and
complementary official sources (LFS and other surveys)
Long time coverage 1970-2004, with greatest detail for post-1995
Harmonized methodologies on industry classification, capital and
labour input, deflation and aggregations (e.g. market economy,
market services, ICT producing vs. using)
Decomposition of capital and labour input:
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Capital assets in 7 asset types
Labour input in 18 categories (3 x skill; 3 x age and gender)
Broad coverage of EU countries:
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Growth accounts coverage of “old” EU-10 (excl. GR, IR, LU, SE, PT)
plus 5 new member states (incl. PL, SK, HU, CZ and SI) & Euro area
Limited coverage of other 5 other “old” EU countries and 5 new member
states (CY, MT, LT, LV and EE)
Also comparisons with U.S. and Japan
Statistical vs. analytical modules of database
Analytical module of the database
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Core of the EU KLEMS database
Uses “best practice” techniques in area of growth accounting
Focuses on international consistency
Aim is full coverage (country * industry * variable) for revision period
Consider alternative or pioneering assumptions (e.g., output and price
measurement of ICT goods and non-market services, measurement of skill
levels, construction of capital services, capitalization of intangible assets).
Analytical database is a research data base and are not official statistics
Statistical module of the database:
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Developed parallel to the analytical module
Data consistent with those published by NSIs
Methods according to rules and conventions on national accounts, supply
and use tables, commodity flow methods, etc. (SNA 1993, ESA 1995) or at
least supported by NSI’s
Statistical module meets statistical standards of NSI's and Eurostat and
can eventually be incorporated in their present statistical practices and in
New Cronos.
Leading themes in feedback from NSI’s
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General support for development of KLEMS growth accounts in
conjunction with national accounts
Still large consistency problems with official national accounts
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Most NSI’s (but with some exceptions) cannot promise
implementation of KLEMS account in their statistical system
In many cases statistical module cannot go beyond official
national accounts:
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Only output and labor input (employment and in some cases) hours can be
compared
… and even for those variables not always complete consistency
Labor composition (age, gender, skill) and capital services not available in
national accounts framework
No information on comparative levels with national accounts framework
As published by NSI or transferred to Eurostat
Will leave many statistical modules rather empty, and will not go beyond
labour productivity
Limited to no resources for most NSI’s to work on productivity
numbers
Many comments focused on differences
national accounts versus EU KLEMS (I)
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General:
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Direct comparison with official national accounts only useful for statistical module
purposes – analytical module is bound to differ
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Revisions and more recent (or later) data deliveries to Eurostat
Aggregation to EU-aggregates (Eurostat) is done with PPPs
Rounding differences
Current value added and gross gutput:
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National accounts are complemented with other sources if not available for the
entire period (e.g. for new member states)
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Adjustments for FISIM (e.g. UK) and implausible results (e.g. outputemployment, GO-II-VA, negative output is excluded from growth account)
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Inconsistency between National Accounts (annually revised) and Supply and
Use tables (not fully revised backwards)
Constant value added and gross output:
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Analytical module is aggregated from detailed industry level with Tornquist
aggregation which can lead to differences on A31 level and higher
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If value added turns negative, index cannot be calculated in analytical module
Many comments focused on differences
national accounts versus EU KLEMS (II)
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Total employment and employees:
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EU KLEMS uses headcounts for all countries (with adjustments from jobs for AT,
ES, UK)
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EU KLEMS uses employment numbers not adjusted for leave (e.g. maternity
leave in Denmark
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EU KLEMS has in some cases adjusted NA data to correct implausible results
(e.g. employees numbers above employment numbers)
Hours worked
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In case no hours for self-employed were available, we have assumed selfemployed to work the same hours as employees
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For some countries additional data on self-employed, leave and unregistered
work has been added to adjust NA data to actual hours
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Adjustments for implausible average hours per person
Generally complementary national accounts and growth accounts
provide very useful check results
Next steps in EU KLEMS until end of 2007
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New version of analytical module (December 2007):
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Revisions of data provided by NSI’s
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Provide capital stocks in additional to capital services?
Updates to 2005
Extend to include Greece, Portugal and Ireland and some of the remaining new
member states
Provide levels of capital services and TFP
Plan for maintenance and prolongation of analytical module
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Central development will remain necessary for time being, probably by EU
KLEMS consortium (or sub-group)
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Depending on financial support from European Commission and other parties
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Possible extension of database (more country detail, intangibles incl. human
capital, link with micro data)
Analytical module can only be used for research purposes until convergence with
statistical module has further developed
Development of statistical modules for individual countries and
implementation (see below)
Options for statistical module
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According to Eurostat/EU KLEMS letter (29 November 2006):
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Integrate analytical and statistical module
Use (modified) subset of data from analytical module in statistical
module
No data from analytical module in statistical module
Reactions from NSI’s (summarized in EU KLEMS Statistical
Progress Report, May 2007)
Options for statistical module
Strategy with regard to statistical module
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Follow-up contact between consortium members and NSI on details of
implementation:
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Which series precisely to include:
1. Non-official but accepted data (grey)
2. Not accepted data (should be removed)
3. Official data that can stay in (black)
4. Own data of the statistical office that should replace EU KLEMS data (blue)
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Which time frame for publication?
Who does what? (NSI, consortium member, joint effort)
If only official output and value added as published in national
accounts, is it really worth to have a statistical module?
Check to include investment, capital stocks and labor composition
data in public version
The development of the statistical module is crucial to move EU
KLEMS beyond a research database
EU KLEMS consortium partners are willing to provide advice and help

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