Page 11 - IDEA Study 3 2018 Low skilled

2. Data Description and Methodology

This study takes advantage of three main datasets: the Czech Labor Force Survey (LFS),
the Average Earnings Information System (AEIS), and the Czech Survey of Income and
Living Conditions (SILC).

The LFS is collected by the Czech Statistical Office and is a large quarterly dataset
providing detailed individual-level information about the highest level of education, labor
market status, and other socio-demographic characteristics of the surveyed individuals.
However, it has no information about wages. We use LFS data for years 2014-2016.

The AEIS data are collected by a private consulting company, Trexima Ltd, which
produces wage statistics for the Czech Ministry of Labor and Social Affairs. The AEIS data
set has extensive information on earnings, hours paid, and the personal characteristics of
employees (as well as employer characteristics) in the Czech Republic.7 We use AEIS data
for years 2014-2016.

The SILC is collected by the Czech Statistical Office as a part of the EU-SILC project. We
use the latest available SILC issue (SILC 2016) along with a TAXBEN model that simulates
the taxes and benefits for individuals and households in the SILC dataset (for details on
the TAXBEN model, see Dusek, Kaliskova and Munich 2013). We use the TAXBEN model
and the SILC data for the sole purpose of describing the work incentives of low-skilled
individuals.

We focus on the population of individuals aged 20-64, unless otherwise stated. The
definition of the low-skilled is based on the highest level of education successfully
completed by a respondent, which is standard in the literature (e.g. European
Commission, 2014). We define the low-skilled as those with primary or lower-secondary
education, i.e. the ISCED 2011 categories 0-2. For comparisons across skill levels, we
define the other three skill categories as follows: Lower middle-skilled are those with
upper-secondary education without a school-leaving qualification (ISCED category 3);
upper middle-skilled are those with upper-secondary education with a school-leaving
qualification or post-secondary non-tertiary education (ISCED categories 3 and 4); and
high-skilled are those with tertiary education (ISCED categories 5 and 6).

7 For more information, see: https://www.ispv.cz/en/about-ispv.aspx

9