OECD Public Finance and Employment Database: History, Aim, and Construction

1. The Public Finance and Empoyment Database of the OECDDirk KraanNational Accounts Working PartyParis 1 December 2010

2. Outline of presentation1. History and aim of the PFED • COFOG-Special • Construction of COFOG-Special • Next steps

3. History of the PFED • The database was first conceived and used in 2002 for an ad hoc purpose, namely the conduct of the OECD Reallocation Study of GOV; only expenditure data; • Since then we have gradually worked on improvementof the data and extension to more countries; • A principal determining factor of progress has been the availability of second level COFOG data. • Second level COFOG data are available from Eurostat;Eurostat has a task force to develop COFOG; currently second level COFOG data, approved by Eurostat are available from some 15 OECD countries, all European; • An expert committee of the 15 participating countries hasbeen established in 2010 and has met for the first time on 4-5 March in Paris.

4. Aim of the PFED • The aim of the PFED is to provide data on expenditure and employment in general government according to a functionalclassification, and simultaneously split accordingto goods in cash versus in kind and according to collective and individual goods. The classification is called COFOG-Special. • COFOG-Special is close to COFOG first level, but some COFOG first level groups that are particularly hard to use (because they include expenditures that have little in common), such as group 1 (General Public Services) and group 4 (Economic Affairs) are split and thus closer to COFOG second level.

5. Two important consistency conditions • An important condition on the PFED is that expenditure and employment data are consistent in the sense that compensation of employment data, included in each COFOG-Special group correspond with employment data. • Since the start of Government at a Glance we also see to it that the PFED data are consistent with GaaG data. Thus farGaaG and the PFED have not been integrated because PFED data are more specific (but not available for all OECD countries).

6. COFOG Special

7. Collective goods in kindCOFOG-Special • 1. General governance services • 2. Basic research • 3. Defence • 4. Public order and safety • 5. Infrastructure and network services • 6. Environmental protection, development and community services • Service regulation • Collective good in cash • Foreign aid transfers • General purpose and block grants • Interest • Individual goods in kind • 11. Health • Non-market recreation, culture and religion • Education • Social services • Market subsidies • Individual goods in cash • Social cash transfers

8. Construction of COFOG-Special (1) • 1st level regular COFOG groups are split, • making use of: • 2nd level regular COFOG groups • the COFOG 1st level/economic cross classifications

9. Construction of COFOG-Special (2) • Data sources: • Eurostat national accounts first level regular COFOG general government • and sub-sectors (cross tables) • 2. Eurostat national accounts second levelregular COFOG general government (cross tables) • Assumptions are used to fill in the blanks due to lack of second level regular COFOG data for sub-sectors for some countries, for instance: • Foreign aid is only provided by central government • no other property income in first level group General public services than Interest

10. Construction of COFOG-Special (3) • Employment data for general government and its subsectors are • thus far only available from Laborsta, the database of the ILO. These data are for many countries not entirely consistent with the • national accounts. • ILO and OECD have agreed to cooperate on the development of employment data that are entirely consistent with the national accounts, in the sense that compensation of employment data correspond with employment data.

11. Construction of COFOG-Special (4) • A first step has been the dissemination of a methodological questionnaire that has been sent to the statistical bureausa few weeks ago; this questionnaire aims to learn more about the nature of the data that are now available in Laborsta (meta-data). • The next step will be a new data-collection questionnaire that will be sent out by ILO/OECD in March 2011, which aims to collect employment data that are fully consistent with expenditure data in the national accounts, also for regular COFOG groups. • The data resulting from the March 2011 questionnaire will be usedto construct employment in the COFOG Special groups by thedistribution of the employment in COFOG groups overCOFOG-Special groups in the same way as is done for expenditures.

12. Next steps • Expenditures • revisions recommended by the expert committee in its meeting of March (on subsidies and some other subjects); • Putting the expenditure part on line for final inspection by the expert committee (January 2011); • Making the expenditure part publicly available (March 2011) • Employment • Data collection questionnaire of ILO/OECD using the results of the meta data questionnaire of October 2010 (March 2011); • Construction of COFOG Special employment data (May 2011); • Next meeting of the PFED expert group (June/July 2011); • Making employment data publicly available (autumn2011).

13. Countries currently in PFED Austria Czech Republic Denmark Estonia Finland Germany Greece Hungary Italy Norway Poland Portugal Spain Sweden United Kingdom

14. Extensions envisaged All 7 EU countries that are members or accession candidates of the OECD (all members of the Task force on COFOG of the European Commission): Belgium, France, Ireland, Luxemburg,Netherlands, Slovak Republic, Slovenia 2. All 15 non-EU countries that are members or accession members of the OECD: Australia, Canada, Chilli, Estonia, Iceland, Israel, Japan, Korea, Mexico, New Zealand, Slovenia, Russia, Switzerland, Turkey, USA.

15. Thank you for your attention