The Linked Employment Cost Index: a first look and estimation methodology

This article provides a first look at the Linked Employment Cost Index (Linked ECI), an index the U.S. Bureau of Labor Statistics is evaluating for potential publication. The article describes the linking Laspeyres methodology used to calculate the index, presents preliminary Linked ECI estimates, and compares these estimates with currently published estimates based on a modified Laspeyres methodology. The analysis suggests that the index estimates obtained from the two methodologies are statistically equivalent. The U.S. Bureau of Labor Statistics (BLS) is exploring the potential publication of a new index of employment cost change. This index, called the Linked Employment Cost Index (Linked ECI), is calculated with the use of a linking Laspeyres approach and is designed to replace the modified Laspeyres ECI already produced by BLS.