ABSTRACT
This chapter has two main objectives. First, it describes the individual cost items to the firm that together constitute non-wage labour costs. The items are ordered into a set of broader categories that not only help to simplify definitions throughout the book but also facilitate the cross-country comparisons of costs undertaken in this and the subsequent chapters. Secondly, it highlights two important dichotomies of NWLCs that are of considerable relevance to the economic analysis of later chapters. These are the distinctions between endogenous and exogenous costs and between quasi-fixed and variable costs. An essential requirement to the latter distinction is some clarification of the system under which firms pay obligatory social welfare contributions, and this is also undertaken here. So as not to burden the main text with tedious detail, information on sources, individual country cost structures and sundry calculations are presented in an Appendix to the chapter.
