Changes for page Resolution III: Resolution to amend Resolution 16th ICLS concerning the measurement of employment-related income

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85	85	** Own-account workers in household market enterprises without employees
86	86	** Dependent contractors
87	87	** Contributing family workers and
	88	+* (b) the amount of employment-related social security benefits received by persons in employment for profit through schemes recognizing the status in employment as a specific condition for membership.
88	88
89		-(b) the amount of employment-related social security benefits received by persons in employment for profit through schemes recognizing the status in employment as a specific condition for membership.
	90	+19. The gross profit (or the share of profit) of unincorporated household enterprises is equivalent to gross mixed income as defined in the System of National Accounts. It corresponds to the value of gross output reduced by operating expenses, where:
90	90
91		-1. The gross profit (or the share of profit) of unincorporated household enterprises is equivalent to gross mixed income as defined in the System of National Accounts. It corresponds to the value of gross output reduced by operating expenses, where:
92		-1*.
93		-1**. the value of gross output may be defined as the value of all goods and services produced for the market as well as for own final use (market output corresponds to the value of goods and services sold, bartered or provided free of charge or at reduced prices as payments in kind to hired labour; production for own final use includes the value of goods and services consumed by the household or retained for use in future production); and
94		-1**. operating expenses comprise three types of business expenditure: (a) intermediate consumption (excluding, as far as possible, expenditure for purely personal or household purposes), (b) compensation of employees payable, and (c) taxes on production payable, minus subsidies received, if any, as defined in the System of National Accounts.
95		-1. In principle, profit (or mixed income) should be recorded net of consumption of fixed capital,
	92	+* the value of gross output may be defined as the value of all goods and services produced for the market as well as for own final use (market output corresponds to the value of goods and services sold, bartered or provided free of charge or at reduced prices as payments in kind to hired labour; production for own final use includes the value of goods and services consumed by the household or retained for use in future production); and
	93	+* operating expenses comprise three types of business expenditure: (a) intermediate consumption (excluding, as far as possible, expenditure for purely personal or household purposes), (b) compensation of employees payable, and (c) taxes on production payable, minus subsidies received, if any, as defined in the System of National Accounts.
96	96
97		-i.e. after deduction of the value of consumption of productive assets (i.e. structures, machinery and equipment, cultivated assets used to produce other products, etc.).
	95	+20. In principle, profit (or mixed income) should be recorded net of consumption of fixed capital, i.e. after deduction of the value of consumption of productive assets (i.e. structures, machinery and equipment, cultivated assets used to produce other products, etc.).
98	98
99		-1. Any contributions of those employed for profit to compulsory employment-related social security or retirement income provision schemes should be deducted from gross profit or mixed income, in order to avoid subsequent double counting of income.
100		-1. Where those employed for profit run their enterprises independently from other partners and contributing family workers, with or without employees, the profit corresponds to both the income generated by the enterprise and the entrepreneur's individual income related to employment for profit. Where those employed for profit run their enterprises in partnership, the profit represents a joint income and income related to employment for profit should correspond to the share of income received by each partner.
101		-1. Employment-related social security benefits received by persons employed for profit comprise those benefits which are paid through schemes organized by social security, insurance institutions or the State, which recognize the status in employment as a specific condition for membership. They may include all or some of the following benefits:
102		-1*.
103		-1**. current employment-related social security benefits received from social security or compulsory insurance schemes or the State; and
104		-1**. current social security benefits received by individuals as a result of their former employment for profit.
105		-1. Net income related to employment for profit may be derived by deducting from gross income related to employment for profit, personal direct taxes and other employment-related obligations.
106		-1. Income related to employment for profit excludes income derived from employment for pay, and other sources not related to employment, such as property income in the form of interest, dividends, income attributed to private insurance policyholders, rents and other forms of property income, as well as annuities, remittances, gifts, etc. It also excludes family allowances and other social security benefits or assistance (e.g. food stamps, government or community housing, free health-care assistance, etc.) paid by social security schemes or the State without regard to the employment status (e.g. under universal schemes with or without means tests).
107		-1. All the components of income related to employment for profit noted in paragraph 18 are relevant for the analysis of the employment-related well-being of those employed for profit. Where the objective is to measure the income-generating capacity of a job for profit, employment-related social security benefits should be excluded.
	97	+21. Any contributions of those employed for profit to compulsory employment-related social security or retirement income provision schemes should be deducted from gross profit or mixed income, in order to avoid subsequent double counting of income.
108	108
109		-=== Measurement issues ===
	99	+22. Where those employed for profit run their enterprises independently from other partners and contributing family workers, with or without employees, the profit corresponds to both the income generated by the enterprise and the entrepreneur's individual income related to employment for profit. Where those employed for profit run their enterprises in partnership, the profit represents a joint income and income related to employment for profit should correspond to the share of income received by each partner.
110	110
111		-==== Evaluation of benefits in kind received by persons in employment for pay ====
	101	+23. Employment-related social security benefits received by persons employed for profit comprise those benefits which are paid through schemes organized by social security, insurance institutions or the State, which recognize the status in employment as a specific condition for membership. They may include all or some of the following benefits:
112	112
	103	+* current employment-related social security benefits received from social security or compulsory insurance schemes or the State; and
	104	+* current social security benefits received by individuals as a result of their former employment for profit.
	105	+
	106	+24. Net income related to employment for profit may be derived by deducting from gross income related to employment for profit, personal direct taxes and other employment-related obligations.
	107	+
	108	+25. Income related to employment for profit excludes income derived from employment for pay, and other sources not related to employment, such as property income in the form of interest, dividends, income attributed to private insurance policyholders, rents and other forms of property income, as well as annuities, remittances, gifts, etc. It also excludes family allowances and other social security benefits or assistance (e.g. food stamps, government or community housing, free health-care assistance, etc.) paid by social security schemes or the State without regard to the employment status (e.g. under universal schemes with or without means tests).
	109	+
	110	+26. All the components of income related to employment for profit noted in paragraph 18 are relevant for the analysis of the employment-related well-being of those employed for profit. Where the objective is to measure the income-generating capacity of a job for profit, employment-related social security benefits should be excluded.
	111	+
	112	+= Measurement issues =
	113	+
	114	+== Evaluation of benefits in kind received by persons in employment for pay ==
	115	+
113	113	27. For the purposes of the measurement of income related to employment for pay, benefits in kind should be valued in terms of the income accruing to the persons in employment for pay. Countries may evaluate these benefits on the basis of retail market prices. When provided free, the value of income in kind is equal to the full value of the goods and services in question. When provided at reduced prices, the value of income in kind is equal to the difference between the full value and the amount paid by the recipient.
114	114
115		-==== Treatment of occupational expenditure of persons in employment for pay ====
	118	+== Treatment of occupational expenditure of persons in employment for pay ==
116	116
117	117	28. Despite the fact that employees and owner-operators of corporations may incur specific expenses associated with working, which counterbalance part of the wages and benefits received, income related to employment for pay should be recorded gross of workers in employment for pay’s occupational expenditure.
118	118
119		-==== Operational approach to the measurement of income related to employment for profit ====
	122	+== Operational approach to the measurement of income related to employment for profit ==
120	120
121		-1. In view of the heterogeneity of those in employment for profit and the complexity of measurement of net income of unincorporated enterprises, the measurement of income related to employment for profit should be phased into national programmes of statistics over an extended period of time. In the initial phase, countries should endeavour to identify and measure the income received by two groups of workers in employment for profit:
122		-11. The first group consists of persons employed for profit operating their enterprises with little or negligible capital input, who produce goods and services in a similar way to employees (such as those engaged in crafts or services, whether in the formal or the informal sector). The income they receive is mostly a return to their labour input and the gross mixed income of the enterprise is a close estimate of net mixed income.
123		-11. The second group consists of persons employed for profit whose activities involve an identifiable amount of capital for the production and generation of income (such as professional workers in the formal sector or workshops in the informal sector). In this case, efforts should be made to quantify the amount of capital used to generate the income and to derive net mixed income. For this purpose, data on the consumption of productive assets (i.e. structures, machinery or equipment, cultivated assets such as trees or animals used to produce other products such as fruit or dairy products, etc.) should, in principle, be collected. Consumption of productive assets may be valued through an estimate of depreciation, according to the business accounting rules in force in each country, or according to the methods contained in the System of National Accounts. Due account should also be taken of the source of data and data collection methods. Where it is not possible to obtain reliable data on consumption of fixed capital from persons in employment for profit, net income related to employment for profit may have to be derived by means of analytical methods.
124		-1. When measuring income related to employment for profit in the informal sector, special attention needs to be paid to the particular circumstances of collecting income data from enterprises in this sector, due account being taken of the guidelines contained in the resolution concerning statistics on the informal economy adopted by the 21st ICLS.
	124	+29. In view of the heterogeneity of those in employment for profit and the complexity of measurement of net income of unincorporated enterprises, the measurement of income related to employment for profit should be phased into national programmes of statistics over an extended period of time. In the initial phase, countries should endeavour to identify and measure the income received by two groups of workers in employment for profit:
125	125
126		-==== Choice of method for recording income related to employment for profit ====
	126	+* (a) The first group consists of persons employed for profit operating their enterprises with little or negligible capital input, who produce goods and services in a similar way to employees (such as those engaged in crafts or services, whether in the formal or the informal sector). The income they receive is mostly a return to their labour input and the gross mixed income of the enterprise is a close estimate of net mixed income.
	127	+* (b) The second group consists of persons employed for profit whose activities involve an identifiable amount of capital for the production and generation of income (such as professional workers in the formal sector or workshops in the informal sector). In this case, efforts should be made to quantify the amount of capital used to generate the income and to derive net mixed income. For this purpose, data on the consumption of productive assets (i.e. structures, machinery or equipment, cultivated assets such as trees or animals used to produce other products such as fruit or dairy products, etc.) should, in principle, be collected. Consumption of productive assets may be valued through an estimate of depreciation, according to the business accounting rules in force in each country, or according to the methods contained in the System of National Accounts. Due account should also be taken of the source of data and data collection methods. Where it is not possible to obtain reliable data on consumption of fixed capital from persons in employment for profit, net income related to employment for profit may have to be derived by means of analytical methods.
127	127
	129	+30. When measuring income related to employment for profit in the informal sector, special attention needs to be paid to the particular circumstances of collecting income data from enterprises in this sector, due account being taken of the guidelines contained in the resolution concerning statistics on the informal economy adopted by the 21st ICLS.
	130	+
	131	+== Choice of method for recording income related to employment for profit ==
	132	+
128	128	1. The choice of an accounting technique to measure income related to employment for profit should take into account the circumstances in which those employed for profit operate their business and the measurement objective. Two major techniques can be used:
129	129	11. Accruals accounting, which measures the profit earned during the reference period, by taking into account receipts and expenses relevant to that period, irrespective of whether or not they have actually been received or defrayed. This technique measures the profitability or economic performance of the enterprise and, as such, could be favoured when the objective is to measure the income-generating capacity of jobs for profit. It is also the approach favoured by the SNA.
130	130	11. The cash-flow technique, which measures actual cash received (including the value of production for own use) and paid out (including the value of production given out free or at reduced prices) during the reference period. This technique provides a better indicator of the amounts of income actually available to workers in employment for profit to meet living expenses. Where data on employment-related income are furnished by those in employment for profit themselves in the absence of business accounts, it is generally easier for them to provide a simple summary of cash received and paid in the assessment period (i.e. gross receipts minus expenditure).
131	131	1. These different techniques may produce different results. In determining the method used to record income related to employment for profit, consideration should be given to the procedures recommended by national tax authorities, the sources of data and the methods of data collection.
132	132
133		-==== Valuation of own production consumed by workers in employment for profit ====
	138	+== Valuation of own production consumed by workers in employment for profit ==
134	134
135	135	33. The part of goods and services produced and consumed by workers in employment for profit and their family members should be valued in terms of the basic prices of similar products sold on the market or of their cost of production if no suitable basic prices are available, as defined in the SNA. In the absence of these prices, retail market prices could be used. Such consumption of own production is similar to payments in kind received by workers in employment for pay.
136	136
137		-==== Treatment of losses of workers in employment for profit ====
	142	+== Treatment of losses of workers in employment for profit ==
138	138
139	139	34. Jobs for profit may, over a given reference period, produce a financial loss instead of income or profit. Losses should be reflected in the measurement of income related to employment for profit and evaluated as negative income.
140	140
141		-=== Statistical units ===
	146	+= Statistical units =
142	142
143	143	1. Two basic observation units are relevant to the measurement of income related to employment for pay or profit, depending on the objective pursued: the job and the individual person.
144	144	1. For the measurement of the income-generating capacity of different economic activities, the //job, //as defined in ICSE, is the basic entity on which information is to be collected and analysed. Jobs can be for pay or for profit, which can be characterized by industry, occupation and employment status, coded at the most detailed level of national or international classifications.
145	145	1. When the objective is the analysis of the employment-related well-being of the population concerned, the desirable unit is the //individual person. //The individual is also relevant when analysing the relationship between employment-related income and educational achievements, seniority in employment, work duration, etc. An individual may be engaged in a single job, have multiple jobs in employment for pay or for profit, or own and operate more than one unincorporated enterprise, simultaneously or consecutively within a given reference period. From the individual's standpoint, employment-related income corresponds to the sum of all incomes generated by all jobs as well as income from former employment.
146	146
147		-=== Reference period ===
	152	+= Reference period =
148	148
149	149	1. In measuring income related to employment for pay and for profit, account should be taken of the seasonal variations which affect the receipt of income, the fluctuations in work intensity of individuals, and the possible combination of multiple activities and periods of activity and inactivity of the population concerned. For this purpose, income related to employment for pay and for profit should be measured over a long reference period, such as a full year.
150	150	1. For data collection purposes, shorter reference periods, such as a month or a quarter, may be used. Different activities and jobs may require different reference periods, such as a month