"Social accounting matrices (SAM) are an extension of National Accounts designed to show the interrelationship between economic and social statistics. For example, a SAM can show how income generated by labour is distributed between people with different characteristics. This article concentrates on that part of the SAM showing how wages and salaries are distributed by sex, education level and industry. The SAM can shed light on issues such as the return to education, the gender pay gap and workforce skills. For example, the 1996 SAM showed that on average, men earned 23 per cent more an hour than women and that the difference in the hourly earnings of men and women was over 20 per cent at all education levels and in all industry sectors, apart from agriculture.ONS produced a pilot SAM for 1996 as part of its involvement in a Eurostat leadership group on SAMs. Two different approaches were used. In the top-down method, National Accounts estimates are used as control totals, whenever they are available, and the estimates from the social surveys (in this case the Labour Force Survey) adjusted to come into line. In the bottom-up method LFS estimates are used and adjusted in the final stage so the total estimate for wages and salaries equals the National Accounts total. The two approaches lead to different estimates for earnings by industry – implying that there are inconsistencies between National Accounts and labour market data. ONS has initiated two projects to reconcile employment and earnings statistics in National Accounts and the labour market.An article describing the structure of the pilot SAM, how it was produced, and the overall results appears in the May 2003 edition of Economic Trends. A further article in Labour Market Trends will cover the household analysis in the SAM."

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