Developing a European Developing a European Socio-economic Classification:Socio-economic Classification:

Why, What and How Why, What and How

www.iser.essex.ac.uk/esecwww.iser.essex.ac.uk/esec

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

University of EssexUniversity of Essex

The ESecThe ESec

Why does anyone want an ESeC?Why does anyone want an ESeC? What is the ESec anyway?What is the ESec anyway? We already have ISCO88 (08) – what is We already have ISCO88 (08) – what is

different about ESec?different about ESec? How do you go about creating ESeC and How do you go about creating ESeC and

what do we need?what do we need?

Why do we want an ESeC?Why do we want an ESeC?

Eurostat Statistical Harmonisation Eurostat Statistical Harmonisation programmeprogramme

Much ‘comparative’ research just uses Much ‘comparative’ research just uses national statistics from different countriesnational statistics from different countries

Need to create common set of core:Need to create common set of core: unitsunits variables and variables and classifications

ESeCESeC

Expert Group appointed by Eurostat in January Expert Group appointed by Eurostat in January 20002000

Proposals for an ESeC made in 2001 Feasibility Proposals for an ESeC made in 2001 Feasibility Report Report

(available from (available from www.www.iseriser..essexessex.ac..ac.ukuk//esecesec))

This report forms the basis for the projectThis report forms the basis for the project

Form of classificationForm of classification

Outline classification is two-level ‘nested hierarchy’ (see Outline classification is two-level ‘nested hierarchy’ (see French French PCS)PCS)

Level 1 – nine (ten) classes, reduces to five or threeLevel 1 – nine (ten) classes, reduces to five or three

Level 2 – thirty-five (forty four) socio-economic groups’ Level 2 – thirty-five (forty four) socio-economic groups’ (SEGs) (SEGs)

This covers the whole population at the individual level.This covers the whole population at the individual level.

Includes all the various ‘other active’ and ‘inactive’ groups. Includes all the various ‘other active’ and ‘inactive’ groups.

What does the ESeC measure?What does the ESeC measure?

Rooted in long traditions within the Rooted in long traditions within the study of social stratification in European study of social stratification in European sociologysociology

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

What does the ESeC What does the ESeC NOTNOT measure? measure?

SkillSkill

EducationEducation

Status or PrestigeStatus or Prestige

Job ComplexityJob Complexity

Classifying the European Labour ForceClassifying the European Labour Force

Basic SEC Positions

EMPLOYERS SELF-EMPLOYEDWORKERS

EMPLOYEES EXCLUDED

Distinguishing among EmployeesDistinguishing among Employees

Over 80 per cent of workforce Over 80 per cent of workforce ‘employees’!‘employees’!

Differentiate them in terms of employment Differentiate them in terms of employment relations:relations:

Do they have a ‘labour contract’ or a Do they have a ‘labour contract’ or a ‘service relationship’? Or a mixture of the ‘service relationship’? Or a mixture of the two? two?

Typical elements of the Typical elements of the Labour ContractLabour Contract

Short-term exchange of money for effortShort-term exchange of money for effort

Payment by the time or piecePayment by the time or piece

No occupational pension or health schemeNo occupational pension or health scheme

Contract easily terminatedContract easily terminated

Low level of job securityLow level of job security

Typical elements of the Typical elements of the Service RelationshipService Relationship

Long-term exchange of service for compensationLong-term exchange of service for compensation Greater job security and employabilityGreater job security and employability SalarySalary Incremental or similar payment systemsIncremental or similar payment systems Occupational pension and health schemesOccupational pension and health schemes Greater control over the job and thus trust Greater control over the job and thus trust

between employer and employeebetween employer and employee

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

1.1. Large employers, higher managerial and professional Large employers, higher managerial and professional occupationsoccupations

2.2. Lower managerial and professional occupationsLower managerial and professional occupations3.3. Intermediate occupationsIntermediate occupations4.4. Small employers and own account workersSmall employers and own account workers5.5. Employers and self-employed in agricultureEmployers and self-employed in agriculture6.6. Lower supervisory and lower technician occupationsLower supervisory and lower technician occupations7.7. Lower sales and lower services occupationsLower sales and lower services occupations8.8. Lower technical occupationsLower technical occupations9.9. Routine occupationsRoutine occupations10.10. Never worked and long term unemployedNever worked and long term unemployed

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

11.11. Employers (other than in agriculture) with 10+ Employers (other than in agriculture) with 10+ employeesemployees

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

13.13. Higher managerial occupationsHigher managerial occupations14.14. Higher professional occupations (employees)Higher professional occupations (employees)15.15. Self-employed professional occupationsSelf-employed professional occupations

Class 1 Large employers, higher managerial and professional

occupations

FlexibilityFlexibility

One of the advantages of a nested two-level One of the advantages of a nested two-level schema such as this is that it will permit schema such as this is that it will permit analysts to look ‘inside’ classes. analysts to look ‘inside’ classes.

This will assist them in understanding how life-This will assist them in understanding how life-chances may vary between groups with the chances may vary between groups with the same employment relations. same employment relations.

For example, do higher professionals in SEGs For example, do higher professionals in SEGs 14 and 15 have better health outcomes when 14 and 15 have better health outcomes when compared with higher managers in SEG 13?compared with higher managers in SEG 13?

Extra Socio-economic GroupsExtra Socio-economic Groups

Other active groupsOther active groups01 Other unemployed01 Other unemployed

02 Unpaid family workers02 Unpaid family workers03 National service03 National service

Inactive groupsInactive groups04 Retired04 Retired

05 Students (full-time)05 Students (full-time)06 Children06 Children

07 Permanently sick and disabled07 Permanently sick and disabled08 Looking after home08 Looking after home

Not classifiableNot classifiable00 Occupation not given or inadequately described00 Occupation not given or inadequately described

What do we do with those leftover? What do we do with those leftover? individual level of ESeC individual level of ESeC

Those in SEGs 01-08 do not automatically Those in SEGs 01-08 do not automatically collapse to any class. Individuals in these collapse to any class. Individuals in these groups are re-allocated to either:groups are re-allocated to either:

a)a) Their ‘career typical’ (usually last ‘main’) job Their ‘career typical’ (usually last ‘main’) job or or

b)b) their household class.their household class.

Household Level RulesHousehold Level Rules

Also possible to re-allocate all SEGs to create a Also possible to re-allocate all SEGs to create a Household version of ESeCHousehold version of ESeC

Achieved through the concept of ‘household Achieved through the concept of ‘household reference person (HRP)reference person (HRP)

Usually a given, i.e. part of survey designUsually a given, i.e. part of survey design But if occupational data on all HH members is But if occupational data on all HH members is

available, use ‘dominance’ rulesavailable, use ‘dominance’ rules

What do we need to make an ESeC?What do we need to make an ESeC?

In order for an ESeC to be In order for an ESeC to be fully operationalized in line with in line with our theoretical model, at a minimum we require measures our theoretical model, at a minimum we require measures of:of:occupation, occupation, status in employment, status in employment, labour market position andlabour market position and(in some cases) enterprise size. (in some cases) enterprise size.

In many countries a measure of farm size may also be In many countries a measure of farm size may also be necessarynecessary

OccupationOccupation

Measured by ISCO88 (COM) at (up to) 4 digits or Measured by ISCO88 (COM) at (up to) 4 digits or a national occupational classification similar to it. a national occupational classification similar to it.

Exception is France, but has a Exception is France, but has a Table des Table des CorrespondancesCorrespondances between the between the Catégories Catégories SocioprofessionnellesSocioprofessionnelles (CSP) and ISCO88(COM). (CSP) and ISCO88(COM).

ISCO88(COM) is a core variable for the Eurostat ISCO88(COM) is a core variable for the Eurostat harmonisation programme and so is the obvious harmonisation programme and so is the obvious measure of occupation to use for ESeC.measure of occupation to use for ESeC.

Status in EmploymentStatus in Employment

All classifications distinguish between All classifications distinguish between employers, the self-employed (own account employers, the self-employed (own account workers) and employees. The EU harmonised workers) and employees. The EU harmonised variable is ICSE-93.variable is ICSE-93.

ICSE-93:ICSE-93:1.1. EmployeesEmployees2.2. EmployersEmployers3.3. Own account workersOwn account workers4.4. Members of producers’ co-operativesMembers of producers’ co-operatives5.5. Contributing family workersContributing family workers6.6. Workers not classifiable by statusWorkers not classifiable by status

Labour market positionLabour market position

It is necessary to distinguish more than activity It is necessary to distinguish more than activity status. Our theoretical model requires us to status. Our theoretical model requires us to identify employers by size and between managers identify employers by size and between managers (by size of enterprise or preferably managerial (by size of enterprise or preferably managerial level), supervisors and other employees. level), supervisors and other employees. Managerial status will be dependent on allocation Managerial status will be dependent on allocation to Sub-major Groups 12 and 13 of ISCO88(COM). to Sub-major Groups 12 and 13 of ISCO88(COM). Thus, labour market position involves a Thus, labour market position involves a combination of ICSE-93, enterprise size and combination of ICSE-93, enterprise size and supervisory status.supervisory status.

Number of Employees Number of Employees or Size of Enterpriseor Size of Enterprise

The size cut-off for enterprise size in the non-The size cut-off for enterprise size in the non-agricultural sector varies across the national agricultural sector varies across the national SECs and across datasets: 1-9, 10+; 1-24, 25+; SECs and across datasets: 1-9, 10+; 1-24, 25+; 1-49, 50+ or combinations of these. 1-49, 50+ or combinations of these.

However, since ISCO88(COM) is the However, since ISCO88(COM) is the harmonised occupational classification, then the harmonised occupational classification, then the initial simple rule for ESeC will need to be that initial simple rule for ESeC will need to be that employed by ISCO for managers and employers employed by ISCO for managers and employers – 1-9 and 10+.– 1-9 and 10+.

What do we do with the data?What do we do with the data?

Construct a matrix or lookup tableConstruct a matrix or lookup table Rows are ISCO OUGsRows are ISCO OUGs Columns are employment status or Columns are employment status or

managerial or supervisory positionmanagerial or supervisory position E.g. 7124 (carpenters)E.g. 7124 (carpenters) Self-employed = class 4Self-employed = class 4 Supervisors = class 6Supervisors = class 6 Employees = class 8Employees = class 8

ESeC in a world of incomplete informationESeC in a world of incomplete information

Some data sets may not contain all the elements Some data sets may not contain all the elements required to create ESeC in the prescribed required to create ESeC in the prescribed manner.manner.

ECHP: (2 digits ISCO or less – anonymity)ECHP: (2 digits ISCO or less – anonymity) ESS: ESS:

French occupations 2 digitsFrench occupations 2 digits Norwegian self-employed no occupation codeNorwegian self-employed no occupation code

But ESeC can cope!But ESeC can cope!

‘‘Full’ version: Occupation (4 digits), Full’ version: Occupation (4 digits), employment status, mangerial and employment status, mangerial and supervisory positions, establishment sizesupervisory positions, establishment size

‘‘Reduced’ version: no data on firm sizeReduced’ version: no data on firm size ‘‘Simplified’ version: just occupational data,Simplified’ version: just occupational data,

cases got to typical class for that OUG cases got to typical class for that OUG

Using Fewer ISCO DigitsUsing Fewer ISCO Digits

Datasets do not always code occupation to four Datasets do not always code occupation to four digits – often three or twodigits – often three or two

We have a ‘matrix’ or lookup table with every We have a ‘matrix’ or lookup table with every possible ISCO code:possible ISCO code:

E.g. 2000, 2100, 2140, 2141E.g. 2000, 2100, 2140, 2141

Timetable of WorkTimetable of Work

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

experts for responses - doneexperts for responses - done Statistical Compendium – being undertakenStatistical Compendium – being undertaken Validation studies – in progress, reporting Validation studies – in progress, reporting

November 2005November 2005 Validation conference – January 2006Validation conference – January 2006 ESeC User Guide – Spring 2006ESeC User Guide – Spring 2006 NSIs’ Workshop – Summer 2006NSIs’ Workshop – Summer 2006

Request for Assistance/ParticipationRequest for Assistance/Participation

We want feedback from existing and potential We want feedback from existing and potential users of socio-economic classificationsusers of socio-economic classifications

Matrices and syntax available:Matrices and syntax available:

Contact Contact rosedrosed@@essexessex.ac..ac.ukuk or or ekharrekharr@@essexessex.ac..ac.ukuk..