3 Behaviour of Firms Appendix Table 3). As these items constitute<sup>the major expenditure charges on the benefits side, this</sup> cautions against a simplistic view of the scale of<sup>firm-level functions.</sup>

# 6.1: Costs of Benefits

Considerable uncertainty currently exists with regard<sup>to the respective shares of benefits costs in</sup> firms' labour payments. The survey allows us<sup>to get a reasonably detailed picture on this score. Several</sup> points stand out. First, wages as reflected in<sup>the firms' wage bills (inclusive of the wage tax) account</sup> for roughly _50%_ of total labour costs. Including bonuses<sup>raises this share to just over 60% for the entire</sup> sample. The remaining costs are distributed<sup>over Pensions, Social Insurance taxes, Employment Fund</sup> payments and, most significantly, Social Fund allocations.<sup>The latter amount to over 20% of total labour-</sup> related costs and around 40% of benefits charges (ie; excluding<sup>the wage bill). This information is given</sup> in terms of firm size for 1991.1 - 1992.3 (Figures 20<sup>-22). While we observe considerable variance</sup> over firm size classes, as well as for branches, for the<sup>respective shares, we do in general find a</sup> surprising degrte tf stability. This is also true for<sup>the levels. There is some evidence that social fund</sup> shares have been boosted over 1992, poss Mly as a<sup>mechanism for raising de facto wage payments while</sup> circumventing the excess wage tax, but the trend<sup>is by no means universal across or within firm size</sup> classes. Overall, the inertia in shares is the more<sup>striking feature.</sup> Comparing the first three quarters of 1991 with 1992 real<sup>aggregate labour costs fell slightly.</sup> Small declines were registered in 70% of branches<sup>with, significant increases in the remaining 30%.</sup> Figure 23 shows ie path of aggregate labour-related<sup>costs for the period 1991.1 -1992.3. The main</sup> story is the fair constancy of labour-related costs when<sup>ironing out the climb in statistical claims over the</sup> second half of 1991. As such, we find considerable<sup>corroborative support for the conclusions derived</sup> from more aggregated wage data. Further, we<sup>can pin down reasonable stability in the cost structure</sup> allowing us to conclude that, at least for our sample,<sup>benefits do not appear to have been a widespread</sup> mechanism either for significandy raising or lowering<sup>aggregate labour costs. The path of both the levels</sup> and the shares indicates that including benefits costs<sup>in total labour costs has no marked effect on the</sup> distribution. This holds whether classifying over<sup>branch or firm size, as measured by employment or</sup> value of fixed assets.

Taken from the income side, we likewise find considerable<sup>stability in the shares -wages</sup> accounting for roughly 50% of total labour income,<sup>rising to around 65% when factoring in bonus</sup> payments - and for the levels. In summary, it seems<sup>that benefits, dissociated from more conventional</sup> cash wage or effort-related incentives, comprise<sup>at current prices approximately 35 % of labour income.</sup> The dispersion is dampened by the dominant, across-the-board<sup>weight (0.6) of Social Fund expenditum</sup>