Indicator 10.4.1 Labour share of GDP

Goal 10: Reduce inequality within and among countries

Target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality

Indicator 10.4.1: Labour share of GDP, comprising wages and social protection transfers

2024

8.2.1, 8.5.1

Kenya National Bureau of Statistics

Senior Manager, Industrial statistics

Labour statistics

Production and dissemination of labour statistics

+254-202-911-000

30266-00100, Nairobi- Kenya

dps@knbs.or.ke

Definition:

Labour share of Gross Domestic Product (GDP) is the total compensation of employees and the labour income of the self-employed given as a percent of GDP, which is a measure of total output. It provides information about the relative share of output which accrues to workers as compared with the share that accrues to capital in the production process for a given reference period.

Concepts:

Compensation of employees is the total in-cash or in-kind remuneration payable to the employee by the enterprise for the work performed by the employee during the accounting period. Compensation of employees includes: (i) wages and salaries (in cash or in kind) and (ii) social insurance contributions payable by employers. This concept views compensation of employees as a cost to employer, thus Last updated: 2023-03-31

compensation equals zero for unpaid work undertaken voluntarily. Moreover, it does not include taxes payable by employers on the wage and salary bill, such as payroll tax.

The indicator should be produced using data that cover all economic activities, all employees, and the self-employed. Thus, in addition to the compensation of employees, the indicator should also include the labour income of the self-employed.

GDP represents the market value of all final goods and services produced during a specific time period (for the purposes of this indicator, one year) in a country's territory.

Persons in employment are defined as all those persons of working age who, during a short reference period (one week), were engaged in any activity to produce goods or provide services for pay or profit. For the sake of clarity, the term “workers” is used as shorthand for “persons in employment”.

Persons in employment include employees and self-employed.

Employees are all those workers who hold the type of job defined as paid employment jobs, that is, jobs where the incumbents hold explicit or implicit employment contracts giving them a basic remuneration not directly dependent on the revenue of the unit for which they work.

The self-employed are workers in jobs where the remuneration is directly dependent upon the profits (or the potential for profits) derived from the goods and services produced (where own consumption is considered to be part of profits). The incumbents make the operational decisions affecting the enterprise, or delegate such decisions while retaining responsibility for the welfare of the enterprise. (In this context “enterprise" includes one-person operations.)

The labour income of a self-employed worker is the implicit element of the remuneration for work done by themselves, as opposed to the element of remuneration generated by the ownership of assets.

Percent (%)

Not applicable

Economic Surveys

Surveys

2023

April, 2024

Establishments, Institutions and MDACs

Kenya National Bureau of Statistics

According to the Statistics Act of 2006, Kenya National Bureau of Statistics is mandated to collect, compile, analyze, publish and disseminate official statistics for public use

Labour share of GDP seeks to inform about the relative share of GDP which accrues to workers as compared to the share which accrues to capital in a given reference period.

In order to interpret this indicator effectively, it is important to consider it together with economic growth trends. The share of labour compensation in national output can highlight the extent to which economic growth translates into higher incomes for employees over time (and/or higher earnings for the self-employed). In periods of economic recession, the labour income share provides an indication of the extent to which falling output reduces labour income relative to profits. If labour income falls at a greater rate than profits, the labour income share will be expected to fall. By contrast, if there is a sharper decline in profits than in labour income, the share will rise. For any given level of GDP and profits, the labour income share can fall as a result of falling wages, falling earnings of the self-employed, changes in the composition of employment by income or a combination of these.

Increased production and GDP often lead to improved living standards of individuals in the economy, but this will depend on the distribution of real income and public policy among other factors.

GDP may exclude or underreport activities that are difficult to measure, such as transactions in the informal sector or in illegal markets, etc., thus understating the GDP. Moreover, GDP does not account for the social and environmental costs of production, and is therefore not a good measure of the level of over-all wellbeing.

Statistics produced undergoes a rigorous process of peer review from Technical Working Groups, data providers and editorial teams.

The Bureau employed use of best standards and compilation guides when coming up with the reports

The Kenya National Bureau of Statistics is ISO certified based on 9001:2015 Standard requirements. The processes of compilation, production, publication and dissemination of data, including quality control, are carried out following the methodological framework and standards established by the KNBS, in compliance with the Internationally acceptable standards

The KNBS adheres to Kenya Statistical Quality Assurance Framework (KesQAF) that underlines principles to be assured in managing the statistical production processes and output.

Data consistency and quality checks are conducted through Technical Working Groups (TWGs) before publication and dissemination.

The processes of compilation, production, publication and dissemination of data, including quality control are subjected to a set criteria and standards to ensure conformity.

Data is available on the KNBS website

None

https://www.knbs.or.ke/download/economic-survey-2023/