Page 163 - Special Topic Session (STS) - Volume 3

STS538 Ibrahim S Y.

Issues and challenges in the measurement of cost
of living for the adjustment of salaries of
expatriate officials of international organizations
1
Ibrahim S Yansaneh
International Civil Service Commission, United Nations, New York, NY 10017,
USA

Abstract
The remuneration of the expatriate officials of most international
organizations is often based on the principle of equalization of the purchasing
power of salaries paid at various locations of assignment relative to a reference
duty station. This principle is actualized by the adjustment of salaries to
account for the relative cost of living, measured through cost-of-living surveys.
This paper highlights the issues and challenges associated with the
measurement of cost of living in the context of salary adjustments of
international organizations, with specific focus on the United Nation’s Post
Adjustment System. The paper also discusses measures taken to address and
resolve the specified challenges, as well as related emerging issues and future
directions in this field of statistical endeavour.

Keywords
consumer price index, cost-of-living index, expenditure surveys, price surveys

1. Introduction
This paper highlights some issues and challenges associated with the
measurement of cost of living for purposes of adjusting the salaries of
expatriate officials of international organizations. In the special case of the
United Nations (UN), the measurement of cost of living is regulated by the
Post Adjustment System (PAS), the organization’s salary adjustment system.
The output of the measurement is a “Post Adjustment Index” or PAI. The
remuneration that is derived from the PAI includes a component reflecting
compensation for the cost of living at a duty station relative to New York, the
base of the PAS. Thus, the PAI ensures purchasing power parity of salaries of
expatriate officials in locations around the world, relative to their counterparts
in New York. Challenges are encountered throughout the entire spectrum of
activities related to the survey process associated with the cost-of-living
measurement, as well as the application of the results to the setting and

1 yansaneh@un.org
The views expressed in this paper are those of the author and do not necessarily reflect the
views of the United Nations

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