A European Socio-economic Classification:A European Socio-economic Classification:How we got here and where we are goingHow we got here and where we are going

More info @ www.iser.essex.ac.uk/esecMore info @ www.iser.essex.ac.uk/esec

David Rose & Eric HarrisonDavid Rose & Eric HarrisonInstitute for Social and Economic Research

University of Essex

Eurostat Statistical Harmonisation Programme

• Aims to create a common set of

core units

core variables and

core classifications

for use in European and national social statistics

ESeC

• Expert Group appointed by Eurostat in January 2000

• Proposals for an ESeC made in 2001 Feasibility Report (see www.iser.essex.ac.uk/esec)

• This report forms the basis for the project

Form of classification.Form of classification.

The outline classification takes the form of a two-level nested hierarchy, similar to classifications such as the French PCS. In its disaggregated form (level 2, what we term ‘Socio-economic Groups’ - SEGs) it covers the whole population at the individual level.

There are SEGs to cover various ‘other active’ and inactive groups. Individuals who are allocated to these groups on the basis of current status may then be allocated to ESeC classes in a variety of ways, depending partly on analytic purpose and partly on the group concerned.

Possible ESeC ‘Classes’ (Level 1)Possible ESeC ‘Classes’ (Level 1)

1. Large employers, higher managerial and professional occupations

2. Lower managerial and professional occupations3. Intermediate occupations4. Small employers and own account workers5. Employers and self-employed in agriculture6. Lower supervisory and lower technician occupations7. Lower services etc occupations8. Lower technical occupations9. Routine occupations10. Never worked and long term unemployed

Conceptual basis for the NS-SECConceptual basis for the NS-SEC(Goldthorpe)(Goldthorpe)

• Employment relations and conditions are central to delineating the structure of socio-economic positions in modern societies

The Derivation of the NS-SECThe Derivation of the NS-SEC

Basic SEC Positions

EMPLOYERS SELF-EMPLOYEDWORKERS

EMPLOYEES EXCLUDED

Dimensions of work as sources of contractual hazard

Difficulty of monitoring

Specificity of human assets

low

low

high

high

Typical elements of the Labour Typical elements of the Labour ContractContract

• Short-term exchange of money for effort

• Payment by the time or piece

• No occupational pension or health scheme

• Contract easily terminated

• Low level of job security

Typical elements of the Service Typical elements of the Service RelationshipRelationship

• Long-term exchange of service for compensation

• Greater job security and employability

• Salary

• Incremental or similar payment systems

• Occupational pension and health schemes

• Greater control over the job and thus trust between employer and employee

Dimensions of work as sources of contractual hazard, forms of contract and class locations

Difficulty of

monitoring

Specificity of human assets

low

low

high

high

Labour c

ontract

Service

relat

ionsh

ip

mixed

mixed

6

3

1

9

The conceptual derivation of ESeCThe conceptual derivation of ESeC

Basic SEC PositionsBasic SEC Positions

EMPLOYERSEMPLOYERS SELF-EMPLOYEDSELF-EMPLOYEDWORKERSWORKERS

EMPLOYEESEMPLOYEES EXCLUDEDEXCLUDED

LABOUR CONTRACTLABOUR CONTRACT

Form of employment regulationForm of employment regulation

SERVICE RELATIONSHIPSERVICE RELATIONSHIP MIXEDMIXED

Higherprof

Lower prof/Tech

Other Agric etc

Higherprof

Lower prof/Tech

Other Agric etc

Higherprof

Lowerprof/Tech

Other

Lower

SupProf/Tech

ManProf Man

Higher

Never Never workedworked

LargeLarge SmallSmall

Super- Serv- Lower routineSuper- Serv- Lower routinevisory/ ices technicalvisory/ ices technicalTechnicianTechnician

Clerical Sales Services Clerical Sales Services

Professional Professional managerial, etcmanagerial, etc

Unemp-Unemp-loyedloyed

1 1 1 1 2 5 4 1 2 5 4 1 1 2 2 2 3 3 3 6 7 8 9 10 101 1 1 1 2 5 4 1 2 5 4 1 1 2 2 2 3 3 3 6 7 8 9 10 10

Underlying ESeC ‘Socio-economic Groups’ Underlying ESeC ‘Socio-economic Groups’ (Level 2)(Level 2)

11. Employers (other than in agriculture) with 10+ employees

12. Farmers with full-time employees (or ‘large business’ farmers)

13. Higher managerial occupations

14. Higher professional occupations (employees)

15. Self-employed professional occupations

Class 1 Large employers, higher managerial and professionaloccupations

Other active groupsOther active groups01. Other unemployed

02. Unpaid family workers

03. National service

Inactive groupsInactive groups04. Retired

05. Students (full-time)

06. Children

07. Permanently sick and disabled

08. Looking after home

Not classifiableNot classifiable00. Not classifiable (occupations not given or inadequately

described etc.)

Classification rules for the individual level of Classification rules for the individual level of ESeC ESeC

The ‘other unemployed’ in SEG 01, unpaid family workers in SEG 02, national service personnel in SEG 03 and the inactive SEGs 04 - 08 do not immediately collapse to any class. Rather, individuals in these groups are (re-) allocated to the group of their ‘career typical’ (usually last ‘main’) job or to their household class.

Household level rulesHousehold level rules

The household level of this classification would work in a similar way, except that the ESeC class position (level 1) would be allocated through a household class measure. In this case, those in SEGs 01-08 and 00 would be allocated to their household class.

Equally, those allocated to SEGs 11-92 would take on the ESeC values of their household.

FlexibilityFlexibility

One of the advantages of a nested two-level schema such as this is that it will permit analysts to look ‘inside’ classes. This will assist them in understanding how life-chances may vary between groups with the same employment relations. For example, do higher professionals in SEGs 14 and 15 have better health outcomes when compared with higher managers in SEG 13?

Number of SEGs (1)Number of SEGs (1)

As far as the number of SEG categories to be recognised within each class is concerned, this is partly an issue of face validity, i.e. of grouping together in sub-categories similar types of occupations that share similar employment relations.

It should be noted that the SEGs within this outline classification are only postulated ones, designed to help illustrate how a possible two-level classification might work.

Number of SEGs (2)Number of SEGs (2)

However, it is the classes themselves that will need to be validated. Which SEGs we then wish to recognise within each class will be largely a matter of contingency, depending upon, for example, what might be useful for the internal analysis of classes, face validity issues, etc.

The question of which SEGs ‘exist’, therefore, relates to which useful class sub-divisions we might wish to make among those combinations of occupation and employment status that share similar employment relations.

Criterion validation of ESeC (1)Criterion validation of ESeC (1)

We have a measure similar to ESeC that has already been created and validated using the method of collecting employment relations data at the level of occupations. This is the UK NS-SEC. We will also build on previous European research aimed at developing a comparative measure of social structure similar to ESeC, for example the Comparative Analysis of Social Mobility in Industrial Societies (CASMIN).

Criterion validation of ESeC (2)Criterion validation of ESeC (2)

Given the broad similarities of market economies and occupational and industrial structures across the EU, we can expect that employment relations will also be similar. Thus, it is reasonable to begin by creating an ESeC derivation matrix with cell values based on UK employment relations data. These data were collected in the 1996/97 winter quarter of the LFS.

What we have to doWhat we have to do

We have constructed a derivation matrix on the basis of the best available evidence we have on the employment conditions typical for the occupational unit groups of ISCO88(COM). This evidence was drawn from work for the project that produced the UK National Statistics Social-economic Classification (NS-SEC), as well as from earlier work on social mobility by Erikson, Goldthorpe and their colleagues and more recent work by academics on employment relations in Europe. In addition, the matrix is now being examined by NSIs, partners in the project and other nominated academic experts.

Constructing ESeCConstructing ESeC

In order for an ESeC to be fully operationalized in line with our theoretical model, at a minimum we require measures of occupation, status in employment and, in some cases, enterprise size. We also believe that labour market position should be part of what an ESeC measures. In addition, some measure of farm size may be necessary, too, in order to distinguish capitalist farmers from other (e.g. subsistence) farmers. How, precisely, are these common elements to be measured? Do all the datasets we intend to use have these measures in the form required?

OccupationOccupation

For the most part occupation is measured either by (4-digit) ISCO88(COM) or by a national occupational classification similar to it. France is exceptional in this regard, but has developed a Table des Correspondances between the Catégories Socioprofessionnelles (CSP) and ISCO88(COM). ISCO88(COM) is a core variable for the Eurostat harmonisation programme and so is the obvious measure of occupation to use for ESeC.

Status in employmentStatus in employment

All SECs distinguish between employers, the self-employed (own account workers) and employees. In the EU context, we may need to add the category of family worker. The EU harmonised variable is ICSE-93.

ICSE-93ICSE-93

1. Employees

2. Employers

3. Own account workers

4. Members of producers’ co-operatives

5. Contributing family workers

6. Workers not classifiable by status

Labour market positionLabour market position

It is necessary to distinguish more than activity status. Our theoretical model requires us to discriminate between employers by size, the self-employed, and between managers (by size of enterprise or preferably managerial level), supervisors and other employees. Managerial status will be dependent on allocation to Major Group 1 of ISCO88(COM). Thus, labour market position involves a combination of ICSE-93, enterprise size and supervisory status.

Number of employees

The size cut-off for enterprise size in the non-agricultural sector varies across the national SECs: 1-9, 10+; 1-24, 25+; 1-49, 50+ or combinations of these. However, since ISCO88(COM) is the harmonised occupational classification, then the initial simple rule for ESeC will need to be that employed by ISCO for managers and employers – 1-9 and 10+.

Example illustration of parts of the ESeC derivation matrixExample illustration of parts of the ESeC derivation matrix

Note: in this table, for simplicity’s sake, we assume a seven-category empstat (i.e. that ‘farm’ can be established via ISCO).

Empstat

ISCO OUG

S/emp10+

S/emp<10

S/empNone

Manager10+

Manager<10

Super-Visor

Employee

12xx 111 X X 113 X X X

13yy X 441 442 X 221 X X

3xxx 115 225 225 X X 222 222

3yyy 115 225 225 X X 222 222

5xxx 111 441 442 X X 226 333

Reduced ESeCReduced ESeC

Some data sets may not contain all the elements required to create ESeC in the prescribed manner. However, it would also be possible to produce a ‘reduced’ form of ESeC for use where data on establishment size are not given. Naturally, the costs and benefits of this would have to be assessed for each member state. The reduced form could be derived in essentially the same way as the full form of ESeC, except that (ignoring the agricultural sector again) the employment status variable would only have five categories:

1. Self-employed with employees;2. Self-employed with no employees;3. Manager4. Supervisor5. Employee

The ESeC category for self-employed with employees and for managers would be based on the modal employment status category for each occupation.

Simplified ESeCSimplified ESeC

The simplified form of ESeC would be for data sets in which only information on occupation (i.e. on 4 digit ISCO OUG) is available. The primary rule would be that occupations (OUGs) are allocated to the ESeC category for ‘other employees’, except where these are in a minority within that occupation or an occupation has no ‘other employee’ status (e.g. managers). In these cases the ESeC category of the modal occupation by employment status combination would be used. Hence, for example, if within a particular OUG supervisory status predominates, then the ESeC value for supervisors in that OUG will apply.

Next Steps

• Create derivation matrices: done• Matrices + report to partners, NSIs, Eurostat and

experts for responses - done• Statistical Compendium – being undertaken• Validation studies – May to November 2005• Validation conference – January 2006• ESeC User Guide – mid 2006• NSIs’ Workshop – mid 2006