From Statistics Explained
- Data from January 2013, most recent data: Further Eurostat information, Main tables and Database.
This article analyses the results of the four-yearly structure of earnings survey (SES) that provides comparable in-depth information at European Union (EU) level on the link between the level of earnings and the individual characteristics of employees (sex, age, occupation, educational level) and their employer (economic activity, size of the enterprise, etc.).
The SES is a large enterprise survey providing detailed information on the structure and distribution of earnings in the EU. The SES is important in compiling other structural indicators such as the gender pay gap, the low-wage trap or the unemployment trap.
The figures below, based on the latest vintage of the SES, relate to October 2010. Data refers to all employees (excluding apprentices) working in enterprises with 10 employees or more and which operate in all sectors of the economy except agriculture, forestry and fishing (NACE Rev. 2 section A) and public administration and defence; compulsory social security (NACE Rev. 2 section O). EU and EA aggregates are compiled as the sum of all Member States except Greece (EL), for which data was not available at the time of drafting this article.
Main statistical findings
Median gross hourly earnings
Median gross hourly earnings vary by a factor of 1 to 17 across the EU
In the EU, the highest median gross hourly earnings in October 2010 were recorded in Denmark (EUR 25.0), followed by Ireland (EUR 18.3) and Luxembourg (EUR 17.8) (Figure 1). The lowest were recorded in Bulgaria (EUR 1.5), Romania (EUR 2.0), Lithuania (EUR 2.7) and Latvia (EUR 2.9). Median earnings are defined such that half of the population earns less and the other half earns more than this value.
Within the EU, the median gross hourly earnings varied by 1 to 17 in euro whereas the difference is reduced to 1 to 5 in purchasing power standards (PPS) which account for price differentials across countries (as measured for the gross domestic product - GDP).
One in every six EU employees a low-wage earner
In 2010, 17 % of EU employees were low wage earners against 14.8 % in the euro area. The highest proportions of low-wage earners were observed in: Latvia (27.8 %) ; Lithuania (27.2 %) ; Romania (25.6 %) ; Poland (24.2 %) and Estonia (23.8 %) and the lowest in: Sweden (2.5 %) ; Finland (5.9 %) ; France (6.1 %) ; Belgium (6.4 %) and Denmark (7.7 %).
Low-wage earners are defined as those employees earning two thirds or less of the national median gross hourly earnings. Hence, the threshold that determine low-wage earners is relative and specific to each Member State.
There was a minor increase in low-wage earners compared to 2006, the last reference year available for the same data collection. In fact, the share of low-wage earners has increased by just 0.2 percentage points (p.p.) in the EU and 0.4 p.p. in the euro area (Figure 2). The countries recording the highest increase in the proportion of low-wage earners (among the 14 EU countries where it raised) were Malta (+3.9p.p.) and Bulgaria (+3.1p.p.). On the other hand, 11 EU countries recorded a decrease with the largest drop being observed in Portugal (-4.6p.p.); Latvia (-3.1p.p.); Hungary and Slovenia (both -2.1p.p.) and Lithuania (-1.9p.p.).
Earnings and low-wage earners by sex
Women more likely to be low-wage earners than men
There are sizeable differences between men and women when it comes to earnings and the proportion of low-wage earners (Table 1). In 2010, in the EU, 21.2 % of women were low-wage earners agaisnt 13.3 % for men. This discrepancy was observed in all Member States, except Bulgaria where the proportion of low-wage earners among men (22.5 %) was larger than that of women (21.6 %). The largest gaps between the proportions of low-wage earners among women compared with men were registered in Austria and Cyprus (more than 16 p.p. in both cases).
When turning to gross hourly earnings, the EU median value was EUR 12.8 for men and EUR 11.0 for women. Estonia and Cyprus recorded the largest relative difference (25 %) between women and men. The median gross hourly earnings were higher for men than women in all EU countries except Luxembourg and Slovenia that recorded 17.8 and EUR 7.1 for men against 18.0 and EUR 7.3 for women, respectively.
Higher level of education yields higher earnings
Education pays off: employees with tertiary level of education earned per hour almost twice as much as those with a low level of education
In the EU, the median gross hourly earnings of employees with a high level of education (EUR 16.3), was almost one half above the figure for those with a medium level of education (EUR 11.3) and 70 % above the level recorded for employees with a low level of education (EUR 9.6) (Table 2). Employees with a high level of education are defined as those who have at least completed the first level of tertiary education whereas those who have completed secondary education but not tertiary level are considered as of medium level. Employees whose level of education is not beyond the second stage of basic education are considered of low level of education.
Employees with a high level of education in Portugal (EUR 11.8) recorded median hourly earnings of almost three times the value of those with a low level of education (EUR 4.1). Besides Portugal, the highest ratio between the median hourly earnings of employees with a high level of education and those with a low level were recorded in Germany and Romania (factor of 1 to 2.5). Employees with a medium level of education in Cyprus (EUR 7.6), Poland (EUR 3.4) and Portugal (EUR 5.3) earned slightly less than half of those with a high level of education (15.3, 6.9 and EUR 11.8 respectively).
Low-wage earners and educational attainment
Employees with low level of education almost five times more likely to be low-wage earners than those with high level
The level of education plays an important role: the lower the level, the higher is the likelihood of being a low-wage earner. In 2010, the proportion of low-wage earners among employees with a high level of education was 5.8 % in the EU. This proportion increases to 19.3 % for a medium level of education and to 29.0 % for a low level (Figure 3). Whereas more than half of the employees with a low level of education in Germany (54.6 %) and Slovakia (51.5 %) were low-wage earners, Sweden (4.2 %) recorded the smallest proportion of low-wage earners among this category.
The proportion of low-wage earners among employees with a high level of education was lowest in Belgium (0.2 %) and Luxembourg (0.7 %), and highest in Lithuania (13.3 %), Ireland (12.9 %) and Latvia (12.0 %). In Sweden, employees with a medium level of education had a similar likelihood of being low-wage earners (2.6 %) as those with a high level (2.1 %). Similarly, in Cyprus, employees with low (33.9 %) and medium (33.6 %) levels of education both recorded almost the same proportion of low-wage earners.
Low-wage earners and type of employment contract
Almost one in every three employees on a fixed duration contract is a low-wage earner
Considering the proportion of low-wage earners by type of employment contract, we observe that 31.3 % of employees with a fixed term contract were low-wage earners in 2010, compared to 15.7 % of employees with an indefinite contract (Figure 4). Fixed term contract employees had a higher rate of low-wage earners in all EU countries except Cyprus (14.9 % against 22.9 % for indefinite contract employees) and Estonia (23.1 % against 23.8 %).
Latvia (27.4 %), Lithuania (27.0 %) and Romania (25.4 %) had the highest proportions of low-wage earners among employees with indefinite contracts while the Netherlands (47.9 %) and Poland (42.5 %) recorded the highest proportions among employees with fixed duration contracts. In Finland, an employee on a fixed duration contract has almost four times the probability of being low-wage earner (16.8 %) than one on an indefinite contract (4.3 %). After Finland, the highest ratios were recorded in France (probability 3.5 times higher) and Luxembourg and the Netherlands (about 3 times higher).
Low-wage earners and age category of employees
Higher proportion of low-wage earners among employees below 30 years of age
In the EU, three in every ten employees (excluding apprentices) below the age of 30 were low-wage earners (30.4 %) in 2010. The proportion in the euro area was slightly less (27.5 %). The highest proportions of low-wage earners among employees below 30 years were observed in the Netherlands (46.1 %) and the United Kingdom (40.6 %) and the lowest in Sweden (9.5 %).
While the proportion of low-wage earners among employees between 30 and 49 years of age (13.7 %) is slightly lower than for those aged 50 and over (14.5 %) at EU level, different patterns are observed at country level. Thirteen countries registered a higher proportion of low-wage earners among the 30-49 age category, while twelve countries recorded the opposite. The countries with the highest proportion of low-wage earners among the 30 to 49 years old were Latvia (26.9 %) and Lithuania (26.3 %) while for those 50 years and over, the highest proportion was observed in Estonia (31.2 %). (Figure 5).
Earnings and low-wage earners in the economic activities of the EU
The financial and insurance activities remain the highest paying sectors in the EU
In 2010, in the EU, the highest median gross hourly earnings (EUR 18.0) were recorded in "Financial and insurance activities" (NACE Rev. 2 section K) followed by "Information and communication activities" (NACE Rev. 2 section J) at EUR 17.0 (Table 3). The lowest median gross hourly earnings (EUR 7.7) were recorded in "Mining and quarrying" (NACE Rev. 2 section B). This means that the median gross hourly earnings across all sectors of the economy varied by a factor of 2.
Nonetheless, "Mining and quarrying" recorded the third lowest proportion of low-wage earners (3.6 %) after section D: "Electricity, gas, steam and air conditioning supply" (1.9 %) and "financial and insurance activities" (3.0 %). The highest proportions were observed for "Accomodation and food services" (NACE Rev. 2 section I) and "Administrative and support service" (NACE Rev. 2 section N) at 42.9 % and 40.4 % respectively.
Data sources and availability
The Structure of earnings survey (SES) is carried out with a four-yearly periodicity according to Regulation 530/1999. The most recent available reference years for the SES are 2002, 2006 and 2010. The data collection is based on legislation and data become available approximately 2 years after the end of the reference period.
National statistical offices collect the information on earnings used in the survey and it contains questions about the enterprise and on the individual employee, aiming to gather individual data on earnings and working hours, as well as personal characteristics and characteristics of the jobs.
The statistics of the SES refer to enterprises employing at least 10 employees in all areas of the economy except agriculture, forestry and fishing (NACE Rev. 2 section A) and public administration and defence; compulsory social security (NACE Rev. 2 section O). Economic activites are classified using the Statistical classification of economic activities in the European Community (NACE). SES 2002 and 2006 are classified in NACE Rev.1.1 whereas SES 2010 is classified in NACE Rev.2. The inclusion of section L (in 2002 and 2006) and section O (in 2010) as well as the inclusion of enterprises with fewer than 10 employees is optional.
Occupations are coded according to the International standard classification of occupations, 1988 - ISCO-88 (COM) in 2002 and 2006 whereas SES 2010 is coded in ISCO-08.
The variable 'Highest successfully completed level of education and training' is classified using the International standard classification of education, 1997 version (ISCED 97) and the education level groupings are as follows: Low level: ISCED 0, 1 and 2 (Pre-primary, primary education or first stage of basic education; Lower secondary or second stage of basic education), Medium level: ISCED 3 and 4 (Upper secondary and post-secondary non-tertiary education), and High level: ISCED 5a, 5b and 6 (Tertiary programmes with academic orientation; Second stage of tertiary education leading to an advanced research qualification).
The regional breakdown is based on the Nomenclature of territorial units for statistics (NUTS).
The main reasons for initiating the European Structure of earnings survey (SES) were set out in Regulation 530/1999 of 9 March 1999 concerning structural statistics on earnings and on labour costs. The objective of the Regulation 530/1999 and the related Commission Regulation 1738/2005 in this domain is to provide accurate and harmonised data on earnings in EU Member States, EFTA countries and candidate countries for policy-making and research purposes.
The SES is a large enterprise sample survey providing detailed and comparable information on relationships between the level of remuneration, individual characteristics of employees (sex, age, occupation, length of service, highest educational level attained, etc.) and their employer (economic activity, size and location of the enterprise).
Users of the SES want to determine the earnings received by employees and to investigate the statistical relationship between the level of the earnings and the individual characteristics of the employees and the characteristics of the employer.
The SES represents a rich microdata source for European policy-making and research purposes. Access to microdata is granted to researchers according to specific conditions and respecting statistical confidentiality.
Further Eurostat information
- In 2010, 17% of employees in the EU were low-wage earners - Statistics in focus 48/2012
- Labour market policy – expenditure and participants - Data 2010 (Pocketbook)
- The unadjusted gender pay gap in the European Union (Eurostat Working paper presented at UNECE Work Session on Gender Statistics, 2010)
- Earnings (t_earn), see:
- Gender pay gap in unadjusted form in % (tsdsc340)
- Earnings (earn), see:
- Structure of earnings survey 2010 (earn_ses2010)
- Gender pay gap in unadjusted form (earn_grgpg)
Methodology / Metadata
- Development of econometric methods to evaluate the Gender pay gap using Structure of Earnings Survey data (Working paper)
- Gender pay gap in unadjusted form - Nace rev.2 (ESMS metadata file - earn_grgpg2_esms)
- Structure of earnings survey 2010 (ESMS metadata file - earn_ses2010_esms)
Source data for tables and figures on this page (MS Excel)
- A Roadmap for equality between women and men 2006-2010 (Commission Communication SEC(2006) 275)
- Equality between women and men — 2010 (Report from the Commission SEC(2009)1706)
- Strategy for equality between women and men 2010-2015 (Commission Communication COM/2010/0491 final)
- Regulation 530/1999 of 9 March 1999 concerning structural statistics on earnings and on labour costs
- Regulation 1738/2005 of 21 october 2005 amending Regulation 1916/2000 as regards the definition and transmission of information on the structure of earnings
- European Commission - Employment, Social Affairs and Equal Opportunities - Gender equality
- European Commission - Employment, Social Affairs and Equal Opportunities - The online GPG calculator
- United Nations Economic Commission for Europe (UNECE) – Gender Statistics