Contribution of labour composition

The labour composition refers to changes occurring in labour input. In productivity surveys, hours worked and labour compensations are cross classified according to employees’ age, educational level and sex. It is thus possible to notice what part of productivity growth is caused by changes in these factors.
The employment statistics data starting from 1975 have been used in evaluating the labour composition. The data are divided into the above-mentioned categories. A specific weight is determined for each category by utilising average wages and salaries in the category (assuming that wages and salaries describe the marginal productivity of the labour force). One category consists of, say, highly educated women aged 30 to 54, who, by their age and education, can be assumed to earn more than a man with upper secondary level education aged under 30, for example. If the relative share of highly educated people, for example, grows inside the total labour input or if the relative pay of the highly educated rises, this is visible as growth in the labour composition term.