JTES ON METHODOLOGY AND SOURCES
ources
- Salary levels: all of the seven broad categories except lawyers taken from the 1989 National Earnings Survey, the figures being given by the Department of Employment. For Lawyers - about which Legal Advisers Library obtained some
DOE had no information
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survey results from the Law Society.
Wace Inflation: a figure for annual wage inflation derived from а national wage index was provided by the Department Ci Employment.
Income tax and National Insurance Contributions: standard information taken in this case from the 1990 FSBR (income tax) and Pay Section (NICS).
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Indirect Tax: Figures provided by HM giving estimates relating indirect tax payments to income levels. These figures have been used in answering written PQS.
Methodology
1. The salary level for a "typical" cccupation within each broad group was used taking the upper quartile level rather than the sample average. This was to capture the effect of potential migrants being near the top of their professions. No upper quartile figure was given for lawyers SO an educated "guesstimate" was made. Since this category makes up only 1% c= the general tranches, the effect on the end result is negligible.
2. The salaries, relating to early 1989 were inflated by just over 9% to allow for wage increases.
3. The income tax and NICS on the resulting gross income levels was calculated in the standard way giving a figure for direct taxes in each broad category. I assumed that the migrants were married in calculating tax allowances.
4. The Treasury figures on indirect taxes could not be matched directly to the salary levels. Most importantly, the treasury only makes estimates up to 1.5 times average income, while most of the figures we are interested in are well above this. However, this does not appear to be too serious: the proportions of gross income that go in indirect tax were reasonably
tax were reasonably similar across salary levels, numbers of children etc. The figure I used for all categories 12.3% - is for someone on 1.5 times the national average income, married with two children.
5. The figures for individual in the seven broad categories were then grossed up to a total of 36200 using the proportions given in the explanatory note. The resulting figure for the two tranches concerned was £457 mr.