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Introducing new weights
for the Employment Cost Index
The Employment Cost Index (ECI), an employment-weighted Laspeyres index, is a measure of change over time in the cost of employing a fixed set of labor inputs. The weights currently used are employment counts by industry and occupation from the 1970 Census of Population. The weights of most Laspeyres indexes are periodically updated, and the ECI is no exception. Beginning in June 1986, the ECI will be calculated using employment weights from the 1980 census.
This article reviews the ECI and its purposes, explains why the 1970 employment weights are to be replaced with 1980 weights, and discusses how the change in weights will affect what the index is measuring.
This excerpt is from an article published in the June 1985 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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