GDP and beyond Eurostat action plan for (2020)

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1 EUROPEAN COMMISSION EUROSTAT Directorate E: Sectoral and regional statistics Doc. DIMESA 2015/12.5_a Item 12.5 of the agenda GDP and beyond Eurostat action plan for (2020) DIMESA 2015 Directors of sectoral and environmental statistics and accounts June 2015 Eurostat, Luxembourg Room Ampère

2 GDP and beyond Eurostat action plan for (2020) The Eurostat "GDP and beyond" action plan for (2020) was presented to the European Statistical System Committee (C) at its 25 th meeting on May The C welcomed the action plan and concluded that the plan should now be submitted for consultation of Directors of sectoral and environmental statistics and accounts (DIMESA), Directors of macroeconomic statistics (DMES) and Directors of Social Statistics (DSS). The action plan is presented in Annex 1 of this document. Part 3 of table 1 on page 13 describes the planned activities in the area of environmental sustainability. The activities listed there are closely linked to the implementation of European Strategy for Environmental Accounts and to the priorities for new legal modules which will both be discussed under agenda point DIMESA is invited to take note of the GDP and beyond action plan and comment on part 3 of table 1 on page 13, which describes the planned activities in the area of environmental sustainability. 2

3 ANNEX 1: GDP AND BEYOND: EUROSTAT ACTION PLAN (2020) 1. INTRODUCTION In November 2011, the European Statistical System Committee (C) adopted the report on Measuring Progress, Well-Being and Sustainable Development 1 prepared by the Sponsorship Group co-chaired by Eurostat and INSEE (France). The report proposed about 50 concrete actions to be carried out by 2020 and concerning the following pillars: 1) Strengthening the household perspective and distributional aspects of income, consumption and wealth. 2) Multidimensional measurement of the quality of life. 3) Environmental sustainability. It was agreed that the recommendations of the report will be reflected in the statistical work programmes and the co-chairs will continue to follow closely the developments in this area. Eurostat as one of the co-chairs set up a GDP and beyond action plan for aligned with the recommendations of the final report and the Eurostat Annual Work Programme. Within Eurostat, a Coordination Group chaired by the Director General has followed-up its implementation. The Eurostat action plan covered most short and mid- actions from Sponsorship Report and since 2012 significant progress has been achieved (see Part A: GDP and beyond: progress report ). In the next years several projects need however to be continued and properly closed by being integrated in the production of the European Statistical System. 2. EUROSTAT ACTION PLAN (2020) The proposed Eurostat action plan for (2020) follows up the recommendations from the final report of the Sponsorship Group. Particular attention is paid to medium- and long- objectives that were not covered by the first action plan. In addition, the new action plan takes into account recent developments based on the outcomes of such initiatives as: the ongoing work of the Friends of the Chair Group on Broader Measures of Progress; 2 results of thematic workshops of High Level Expert Group on the Measurement of Economic Performance and Social Progress; 3 recent UN Secretary-General Report on the Post 2015 Agenda; 4 European Strategy for Environmental Accounts (ESEA) ; Vision 2020; EU Commission priorities. Furthermore, the new needs arising in the socio-economic field of statistics are closely linked to the GDP and beyond context. Therefore it is essential that the new action plan allows incorporation of new elements

4 In the context of multidimensional measures of quality of life, the action plan should better integrate the elements concerning aspects included in the bid for upgrading social statistics such as: household perspective (upgrading social indicators to the same relevance of macroeconomic indicators, integrated social and economic analysis, distribution of national accounts aggregates; income, consumption and wealth; social transfers in kind, etc.), better coverage, timeliness and quality of social data, in particular poverty and inequalities, flows, skills and mobility, etc., modernisation of the social statistical infrastructure, enriched and effective dissemination. A particular attention should be drawn to new and more relevant social indicators for policy makers. This could be reflected through following measures: better coverage of the multidimensional agenda of poverty and social exclusion implemented through: - modularisation of the SILC survey, - adaptation of the periodicities of modules, development of new modules, including quality of life, - better integration of HBS in the system of social surveys. improved description of the flows and transitions, in particular the risk of poverty and exclusion and in the labour market through: - better design of the LFS to improve the description of flows and transitions, - extension of the length of the rotational design in the SILC survey for the same purpose. better capture of the joint distribution of income, consumption and wealth in order to build household balance sheets achieved through: - improved links with national accounts, - improved distribution of aggregated data concerning social transfers in kind. integrated approach towards skills and mobility which can be achieved through better data and analysis of worker s educational attainment, skills, mobility, migration, and integration. Another important aspect which should be reflected in the action plan is more timely data and flash estimates. An increased engagement towards the production of flash estimates that will now-cast the current situation would also contribute to a better timeliness. As example, in addition to the measures foreseen in the national action plans to increase the timeliness of the EU-SILC data, a new project will take place at Eurostat to elaborate, test and put into production methodologies for flash estimates of main poverty and social exclusion indicators aiming at now-casting those indicators. All these measures require a significant enhancement of the social statistics infrastructure. The analytical potential of social indicators should be improved through more integrated data by harmonising concepts, variables and methods across the different statistical sources. Better links with national accounts should be established in order to support analyses at the macroeconomic level. This requires also: harmonisation of concepts and methods within social statistics, including variables, better integration with national accounts (see in the action plan social transfers in kind; household perspective; income, consumption, wealth). 4

5 Use of latest scientific developments, including multimode data collection and access to the administrative data should lead to a more efficient data collection. Developments will also support a more efficient monitoring of Member States' data. A particular importance in this context has: multisource data collection: access and use of administrative data; multimode data collection; improved variance estimation. In addition, enriched and more effective dissemination should be put in focus, which would allow fostering and developing better cross cutting and integrated analysis as well as customisation to users needs. Furthermore, in the context of environmental sustainability the Eurostat action plan includes also actions aligned with the framework as set in the ESEA 2014 for the period focusing on: consolidating the quality of the first set of accounts (air emissions, environmental taxes and material flows), according to Regulation (EU) No 691/2011 on European environmental accounts, promoting the use of existing environmental economic accounts, improving timeliness, including the development of early estimates, to bring environmental, policy aspects more into economic planning, implementing the second set of accounts (environmental protection expenditure, environmental goods and services sector, physical energy flow accounts), investing in statistical infrastructure elements, to improve the availability, quality and usefulness of the environmental accounts, developing methodologies and implementing voluntary data collection for a few additional areas (water and forests, environmental subsidies and similar transfers and resource management expenditure). The table below presents a list of concrete proposals for actions to be implemented in the next years. The action plan for (2020), which is subject to further development, currently includes: recommendations from the Final Report of Sponsorship Group on Measuring Progress, Well-Being and Sustainable Development that were not incorporated in Eurostat action plan and might be taken into consideration for definition of specific steps; actions which have been conducted under the previous action plan which are still on-going; proposals for inclusion of new actions based on projects under development. In recent years, Eurostat has also contributed to the on-going work on the post-2105 development agenda and has participated in the work of the Friends of the Chair Group (FoC) on Broader Measures of Progress. The establishment of a monitoring framework for the Sustainable Development Goals (SDGs) may raise new issues for inclusion in the action plan. 5

6 Table.1 GDP and beyond Eurostat action plan for (2020) Activity Actor Timing Proposed output for Eurostat Action Plan (2020) 1. Strengthening the household perspective and distributional aspects of income, consumption and wealth 1.1 Promoting existing national accounts data on household income and consumption a. Further methodological work on household liabilities: The gross recording of household liabilities, in particular for mortgage loans, is to be further researched with a view to calculating saving rates net of capital redemptions. Long The conceptual issues behind capital redemptions will be investigated and a suitable definition developed. Financial accounts and other data will be investigated to deine if data on capital redemptions could be derived, thereby providing the basis for further analytical work. 1.2 Providing information on the distribution of income, consumption and wealth b. Reconciliation of macro and micro data sources on household s economic resources with the aim to complement national accounts averages with distributional indicators. Medium / Long Participation in the EG DNA; conduction of feasibility studies on reconciliations of micro-macro data taking into account the experiences at EG DNA and based on harmonized data available to Eurostat. In particular the feasibility studies should focus on methodology, a perspective of time series and reconciliation of the three dimensions on income, consumption and wealth. First, distributional indicators of micro data are needed for disaggregation of Sector Accounts household data on income and consumption. Then, further attempts should include also relevant wealth indicators. c. Adjusted disposable income as the reference concept for social statistics and national accounts data. Medium Agreement on further developments with the users and scientific communities (the assumptions and methodological choices behind the exercise, in particular related to STiK calculations) and on their implementation (selection of indicators, calculation of time series and analysis of time series patterns). c1. For social statistics: As a first step, methodology for adjustments for social transfers in kind (STiK) should be agreed. STiK includes public education, health services and perhaps small smaller components. 6 c.1 For social statistics: Agreement on methodological choices for STiK calculations and on relevant indicators, calculation of time series and analysis of time series patterns).

7 c.2 For national accounts: Adjusted disposable income of households (in real s) as the reference concept for social statistics and national accounts data. Together with households saving rate (corrected for durable goods), this indicator could increase the relevance of press releases from macro-economic perspective, being a useful tool for both analysts and common users. d. Better capture of the joint distributions of income, consumption and wealth Short Mid c.2 For national accounts: Sector accounts press releases will focus more closely on growth of adjusted disposable income (and contribution of its components) and consumption. Further improvements can be implemented with focus on available relevant indicators of household well-being. Reflection group on better integration of ICW in the. Development of scenarios and preliminary data estimations based on existing data. e. Publication of annual data: once the methodology is established, publication of annual data would possibly include figures on the distribution of income and (when available) consumption, and then, in a further step, publication of estimates on income and consumption growth by breakdowns of households and on wealth distribution. f. EU-SILC/HBS: Consider the possibility of an EU Regulation to integrate HBS and consider adding (key) variables to the EU legislation covering SILC in order to better measure social transfers in kind at the individual or household level. Long Integration of ICW distributions the social statistics of the. Long First, methodological approach should be developed. In the meantime, experimental publications combining different data sets are not totally reconciled. Publication of additional data should be considered in the context of Annual Sector Accounts (subject to the availability of relevant and reliable time series data on households' distributional indicators and categories). Long Progress in integrating HBS under the I regulation SILC ad hoc module 2016 on access to services Integration of o access module in the redesigned SILC g. Inequalities: Development of new analysis and data sets published in Eurobase. Inequalities refer to income, adjusted income (including STiK), wealth, and joint distributions of income and Short to long Continuation of analysis and calculation of income components by quintile; publication of related SIF and data in the Eurobase; further investigations related to wealth; and joint income and wealth inequalities. 7

8 wealth. 1.3 Encouraging the compilation of aggregated balance sheet accounts for households h. Increase the coverage of the assets: by 2014, Member States should, for the household sector, transmit data for the value of Dwellings ; Land and in particular Land underlying buildings and structures. i. Increase the coverage of household wealth: Consider collecting, annual stock data on the value of consumer durables which are relevant for the analysis of household wealth (such as motorcars, washing machines or computers) j. Improve compilation methods: Complete guidance on compilation of data for Land and develop guidance for other non-financial assets The Task Force on Land and other non-financial assets is finalising a compilation guide on land estimation; land underlying buildings and structures is one of the breakdowns proposed by the TF. Medium Medium 8 Need for further specific actions to be considered. Finalise a compilation guide for data on Land. An international Task Force on estimation of Land and other non-financial assets (in the context of National Accounts) will continue to work on other non-financial assets (including inventories). 1.4 Broadening income measurement to non-market domestic activities and leisure time k. Harmonisation of Time Use Surveys (TUS): 2015 Development of next wave of TUS More work at international level should be done to harmonise Time Use Surveys (TUS) as one possible basic source for estimates on domestic non-market activities l. Frequency of TUS: TUS should be conducted 2020 Integration of TUS under the I regulation at least every ten years, (e.g. through EU regulation) starting in Ideally, light TUS capturing domestic work should be run with a higher frequency. m. Investigation of alternative/complementary data sources: the availability and suitability of alternative/complementary sources on non-market domestic activities such as household budget Short to long Better analysis of existing data. Recommendations for further developments

9 surveys should be investigated. n. Harmonisation of household satellite accounts: A pilot group of experienced countries should be created to propose a common (European) approach in compiling household satellite accounts. o. Valuing Unpaid Household Service Work UNECE TF on valuing unpaid household services with the aim to develop guidelines on valuing unpaid household service work pilot group UNEC E Task Force Medium Need for further specific actions to be considered Guidelines on valuing unpaid household service work. 2 Multi-dimensional measures of quality of life (broad concept, not limited to well-being) 2.1 Cross-cutting issues a. More efficient data collection, using latest Medium scientific developments, including multimode data to long collection and access to the administrative data. Developments will also support a more efficient monitoring of Member States data. multisource data collection: access and use of administrative data, multimode data collection, improved variance estimation. b. Improving the analytical potential of social indicators through more integrated data by harmonizing concepts, variables and methods across the different statistical sources. Better links with national accounts should be established in order to support analyses at the macroeconomic level. Short 9 Methodological analysis and developments (-VIP). Support to Member States for development and testing. Exchange of practices. Work toward systematic approach to precision requirements and variance estimation in the I context. Better indicators allowing integrated analysis of the economic and social situation. Harmonisation of concepts and methods within social statistics, including variables. Better integration with NA (see in the action plan STIK, household perspective, ICW). 2.2 Use of EU Statistics on Income and Living Conditions as the core instrument c. Re-design of EU-SILC activity in the context Short to 1. Final proposal for the list of variables to be included in the core of the modernisation of social statistics. medium (yearly) SILC and in the rolling modules to be validated in In the context of the adaptation of the content of 2. The first results are expected end of January 2015 (first interim report),

10 SILC and relating to quality of life 2. Further work in the context of variation in quality of life across regions d. Improve the EU-SILC indicators so as to allow for integrated analysis of macro-economic and social dimensions e. Subjective well-being questions in the 2013 EU-SILC ad-hoc modules f. Inclusion of further topics in EU-SILC rolling modules ESTAT Short to medium Short Medium to long followed by a second interim report in September In parallel, Eurostat is working on developing precision requirements for the regional EU-SILC based indicators. Development of new social indicators as response to policy needs for better integration of analysis of macroeconomic and social dimensions, including concerning quality of life. Implementation of precision requirements based on variance estimation and better use of administrative data for preparation of new EU-SILC legal base as envisaged in national action plans; share of best practices among Member States; Flagship publication on Quality of life in Europe and more in-depth analysis to be published as Statistics in Focus or methodological papers Yearly, the revision of the EU-SILC legal basis should at least consider inclusion of questions on the overall experience with life and other elements, if possible. In the rolling modules, more elements on QoL and well-being should include: - labour market situation; - situation of the children; - housing conditions; - wealth and debt; - well-being; - intergenerational transmission of disadvantages; - leisure, social participation and interaction; - trust in institutions and satisfaction with public services; - environmental conditions. In order not to further increase the costs and burden associated with EU- SILC, it is considered to replace several of the ad-hoc modules by rolling modules with a fixed periodicity. 2.3 Complement the coverage of the dimensions with additional data sources 10

11 g. Household Budget Survey: will be developed further considering timeliness aspects and harmonisation. h. Time Use Survey: Work will be conducted to extend the country coverage and to improve the quality of the TUS either with better guidelines or a regulation combined with quality requirements. The conduction of light surveys (or specific questions) on the use of time should be considered in between the decennial TUS. The measure of timeuse satisfaction was experimented in the French TUS survey in The results will be examined to assess the potential for -wide recommendations on this topic. - See also 3.1 (priority area 4 broadening income measurement to non-market domestic activities and leisure time ) i. Household Finance and consumption Survey (HFCS provides information on indebtedness over wealth and loan service over gross disposable income. j. Analysis and indicator development: In the preparation of the questionnaires and in the publication of the results of surveys, particular care will be devoted to the comparison between objective and subjective answers to similar questions. Moreover, further work will be conducted on the development of quality-of-life indicators for these domains. 2.4 Deepen and improve analysis k. Compilation of indicators based on existing data ESCB ESTAT Long Integration of HBS under the I regulation. Long Use of the new data available from the new TUS data collection, design of the next TUS wave. Time use survey is a potential unique source to deal with many dimensions of quality of life (unpaid work, work time patterns, work family balance, health, leisure, household and family work, gender issues, etc.). The new data collection of time use will help in providing better information on these issues. Additional information has been collected in the TUS in other countries so as to better cover the QoL aspect. Study of these initiatives in the context of the new design of TUS is needed. Medium Medium to long Short 11 Need for further specific actions to be considered Better approach of quality of work in the LFS Mental health better covered in EHIS Flagship publication; innovative visualisation of the headline indicators;

12 l.1. Improved description of the flows and transitions, in particular the risk of poverty and exclusion and in the labour market l.2. An integrated approach for measurement of skills and for mobility l.2. An integrated approach towards skills and mobility m. Integration of QoL in the statistical production the proper continuation of the phase of development of QoL indicators ESTAT n. Development of synthetic indicators ESTAT o. Establishment of an expert group to support indicator work. The expert group should represent producers, users and other stakeholders. It should in particular further develop the overall list of indicators, work on synthetic indicators and the scoreboard of primary indicators. p. In the context of the modernisation of social statistics, a feasibility study Data matching Final report Eurostat case study on income and wealth (SILC-HFCS) was conducted with the aim to explore a possible progress toward improved data integration. This should be facilitated by using complementarities between surveys, through analysis of sub-populations and where possible through joint distribution ESTAT ESTAT Short to long 12 Better design in the LFS to improve the description of flows and transitions. Extend length of rotational design in SILC survey for the same purpose. Long Better data and analysis on worker s mobility, migration, integration and skills. Long Better data and analysis on worker s educational attainment, skills, mobility, migration, and integration. Short to long Short to long Short Short Better integration of QoL indicators with other initiatives (better convergence at the international level and getting more integrated with sustainable development indicators). Better links between QoL and the wider economic and social impact (two ways causality), that would include also unpaid work. Better use of other data sources, in particular TUS and HBS. Research and test of new methods for combining dimensions with as little assumptions as possible. Final list of indicators (primary and synthetic, headline indicators, available or to be further developed). Final list of indicators, rational and narrative, recommendations for further work and developments in the context of the final report. Scrutinise the results of the project in the reflection group on ICW, adopt the statistical matching exercise for the new policy needs and decide on further developments.

13 (statistical matching/linking). q. Subject of further analysis of the appropriateness of integrating non- data in the quality of life set indicators r. Improvement of methods to better describe the non-financial inequalities ESTAT ESTAT Short to medium Short to medium 3. Environmental sustainability 3.1 Implementation and development of SEEA CF environmental accounts a. Economy-wide material flows accounts. Consolidate data production and improve data quality (accuracy) and timeliness b. Air emissions accounts. Consolidate data production and improve data quality (accuracy). c. Environmental taxes. Further improve data quality incl. timeliness. d. Physical energy flows accounts. Set up data production based on new legal basis e. Environmental goods and services sector. Set up data production based on new legal basis. Improve timeliness EU aggregates. Support ILO green jobs initiative. Investigation on the availability and usability of information on the functioning of society. Dissemination of data sets on quality of life indicators split by high, medium and low situations Data quality improved. Timeliness improved with early estimates at T+9 months Data quality improved Data quality improved. Timeliness improved Annual data production cycle established, including data for all countries and EU aggregates Annual data production cycle established, including data for all countries and EU aggregates. New estimation method for EU aggregates improving timeliness by 12 months. 13

14 f. Environment protection expenditure accounts. Set up data production based on new legal basis. g. Environmental transfers and similar subsidies. Set up pilot data collection. h. Resource management expenditure accounts. Develop conceptual methodology. Publish handbooks and compilation guidelines for countries Annual data production cycle established, including data for all countries and EU aggregates Pilot data collection set up. Encourage countries to transmit Methodological concept developed and handbooks published. 3.2 Developing extensions of the environmental accounts system i. Integrate monetary environmental accounts. Phase 1: Set up a framework integrating the monetary accounts, i.e., environmental goods and 2015 Methodology of monetary environmental accounts integrated, production systems streamlined, efficiency gains by producers of accounts services sector, environmental protection expenditure, resource management, environmental taxes, environmental transfers and other subsidies. j. Integrate monetary and physical accounts. Phase 2: Extend the integrated framework for monetary accounts to the physical accounts (air emissions, material flows, physical energy flows). Identify connections between accounts and exploit analytical potential. k. Environmental IO modelling. Improve quality of carbon footprint and footprints of air emissions. l. Raw material equivalents (RME) accounts. Produce RME estimates for aggregated EU economy. Encourage countries to produce national RME estimates Methodology for integrated physical and monetary accounts Air emissions accounts added to the multi-country supply-use and inputoutput tables (FIGARO project) and modelling results based on it RME estimates for EU. IT tools provided to NSIs to facilitate RME estimates at country level. 14

15 m. Water accounts. Develop conceptual framework in line with SEEA and integrated with other environmental accounts in Europe. Set up pilot data collection. Pursue legal basis for a mandatory data collection. n. Forestry accounts. Develop conceptual framework in line with SEEA and integrated with other environmental accounts in Europe. Set up pilot data collection. Pursue legal basis for a mandatory data collection. o. Geostatistical accounting for ecosystems and other natural capital. Discuss and agree with partners specifications for a project on ecosystem accounts built on integrating several sources, including possibly an extension and enhancement of LUCAS. Setting up IT system for processing geophysical information. p. Use Land Use/ Land Cover data to build relevant indicators on landscape and biodiversity: The further development of landscape and biodiversity indicators would require intensified collaboration with the European Environment Agency and DG Environment on how best to utilise existing statistical information such as Lucas and Corinne. q. Waste accounts Explore the possibilities to develop a materialrecycling indicator based on existing waste statistics and economy-wide material flow accounts, ENV, EEA 2017 Proposal for conceptual framework and data collection. Discussion on legal basis launched Proposal for conceptual framework and data collection. Discussion on legal basis launched., ENV, EEA, JRC, EEA, DG ENV 2017, long Long 2016 Results of testing Project specifications. Agreement with partners. Work to converge and link existing data. Need for further specific actions to be considered 3.3 Supporting activities 15

16 r. Improve analytical use of environmental accounts. Enhance communication, with policymakers, analysts, researchers and users in general. Activate links with research community s. Consider use of press releases to increase visibility. Identify indicators for a possible press release related to or together with GDP (e.g. greenhouse emissions). Feasibility study of improvements in production needed to meet timeliness/periodicity required. Pilot exercise. 4. Communication Methodological work series on statistical indicators Preparation of DGINS conference in Lisbon Preparation of a leaflet on implementation of GDP and beyond action plan Preparation of Sustainable Development Report (2015 edition) Preparation of 2016 Europe 2020 Monitoring Report (2016 edition) Short to long 2017 ESTAT 2015 Publications; increased visibility on websites ESTAT 2015 Agenda of the conference ESTAT 2015 Leaflet ESTAT 2015 Report ESTAT 2016 Report 16