Sweden Finland Austria

Documentation
There is a short documentation of the calculations for each country, c.f. the following. The
documentation is oriented towards the specific calculation of the effect of the ’standard’
events selected, it is not a description of the rules in the social security and taxation sys-
tems of the 8 countries. The detailed calculations for each case are also documented and
stored, but not printed in the publication. They are available on request.
Ministries and organisations in Sweden, Finland, Austria, Germany, the Netherlands, Great
Britain, and Canada have been very helpful in updating the information from 1996 to 1997
and in providing new information for 1997 for their respective countries. This effort is
essential for the correctness of the results presented in the report.

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110
Outline of the APW
As already mentioned, the APW is contained in ’The Tax/Benefit Position of Production
Workers’, now 
The Tax/Benefit Position of Employees', an annual publication from
OECD. 
Characteristics of the APW:
1.
The APW is a worker in the manufacturing industry.
2.
The wage income of the APW is the average (based on hourly wage and hours
worked) in manufacturing industry.
3.
Personal characteristics such as being single or married, with or without children,
which decide the tax/benefit position of the person or family.
Cf.1. The share of employees in manufacturing (out of total employment) is approx. the
same in DK, S, and GB, close to 1/5, while it is higher in FIN, A and D, highest in
D, and lower in NL and CAN. The distribution below is based on 1997 figures.
DK
S
FIN
A
D
NL
GB
CAN
--- Per cent ---
Share of employees
in manufacturing
21
20
23
24
29
18
21
17
Cf.2. The average production worker is adult, working full time within manufacturing
(ISIC division 3), is ’uni-sex’, and is neither ill nor unemployed. Overtime payment
and payment for vacation are included in the income. This is calculated as the aver-
age hourly wages per month or quarter (weighted after hours worked in these peri-
ods), multiplied by the average amount of hours worked during the year. Fringe
benefits are not included in the income. The procedure described is followed by most
countries, but there is some variation.
Cf.3. The tax calculation includes personal taxes of wage income and standard deductions.
Using only standard deductions is a simplification and ’non-standard’ deductions
(e.g. for interest payments in the Danish case) would change the results considerably.
Standard social contributions paid by the employee are also included in the calcu-
lation of disposable income. This concept is calculated in the following way:
Gross wage of APW
Social Security contributions (paid by employees)
Personal tax
+ Family allowances (cash)
= Disposable income

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111
1.
The 1994-edition of the OECD publication contains a study of the position of the APW in the
income distribution in Canada, Denmark, Iceland, Sweden, Great Britain and the United
States.
This concept of disposable income is ’simple’ and does not catch all the variation of the
real world, it is called 
take home pay' in OECD's publication.
The couple with children receives standard family allowances. Subsidies for housing or
day care payments are not considered.