The role of employment and earnings in analyzing levels of living

This paper is intended as a manual for the use of employment and earnings data (as collected in the Living Standards Surverys) in the context of policy analysis of levels of living. The target audience is the staff of statistical offices and user agencies in developing countries who have been charged with providing a first analysis of newly collected data. The analysis proposed in the manual takes into account the limitations of analytic and computing capabilities that typically exist in many countries. In the first part of the manual a set of tables and graphs are suggested, fewer in number than those found in a typical labor force survey report, but which are deemed to bring out better the main facts about employment and earnings, and are directly relevant for selected policy issues. The second part of this study follows up with multivariate analysis of labor force participation and earnings. Relevant econometric issues are explicitly discussed.