Class and Poverty: Cross-sectional and Dynamic Analysis of Income Poverty and Life-style Deprivation

1. Class and Poverty: Cross-sectional and Dynamic Analysis of Income Poverty and Life-style Deprivation Dorothy Watson, Christopher T. Whelan and Bertrand Maitre EPUNet Seminar, May 2006

2. The ESeC project • Goal is to develop a harmonised Socio-economic Classification (SeC) for use in comparative social science research in the EU • Funded under EU’s Sixth Framework • ESeC consortium led by ONS • Teams from U. Warwick, Essex, Erasmus Rotterdam, Mannheim, Stockholm, Milan, ESRI &INSEE • In contact with all EU NSIs and Eurostat

3. ESeC Concept • Drawing on work of John Goldthorpe • Employment relations determine the structure of socio-economic positions in modern societies • Employment status (employer/employee) • For employees: employment relations • (difficulty in monitoring; asset specificity)

4. EMPLOYERS SELF-EMPLOYED WORKERS EMPLOYEES EXCLUDED Service Contract Mixed Contract Labour Contract Derivation of ESeC Basic SEC Positions Monitoring problems Asset specificity

5. ESeC Classes (Level 1) • Large employers, higher managerial & professional • Lower managerial and professional occupations • Intermediate occupations • Small employers and own account workers • Employers and self-employed in agriculture • Lower supervisory and lower technician occupations • Lower services & sales occupations • Lower technical occupations • Routine occupations • Never worked and long term unemployed* • * We reserve class 10 for ‘never worked’

6. Distribution of ESeC (v4, ECHP, Wave 1)

7. Our: Premise and Hypotheses Premise: Classes capture an enduring aspect of differentiation in life chances Stronger class differences as one moves from Income poverty only --> Deprivation and Consistent poverty Point-in-time --> persistent poverty / deprivation Persistent income poverty/deprivation only --> Both

8. Method • ECHP, 1994 and 1994-1998 • Poverty: Median Equivalised Income (below 50 %, 60 %,70 %; modified OECD scale) • Deprivation: Corresponding Deprivation Thresholds (70 % poverty line) • Class at household level (dominance rule); analysis at level of individual (all persons) • ESeC derived based on variables in ECHP: • ISCO88 • Employment status (self employed, employee) • Supervisory status • Size (<20, 20+) and sector (agriculture/other)

9. Car or van Video recorder Dish washer Keeping your home adequately warm Replacing any worn-out furniture Meat, chicken, fish every second day Colour TV Micro wave Telephone Week annual holiday away from home Buying new not second-hand clothes Having friends in once a month Indicators of Life-Style and Deprivation Weighted CLSD • In arrears on rent, utilities, HP

10. Risk of Income Poverty and DeprivationAll Countries, Log Ratio to Average

11. Illustrated Country Differences Consistent Poverty

12. Typology of Poverty & Deprivation Profiles • Persistent non-poor (or non-deprived) -no experience of poverty (deprivation) over time • Transient poor (or deprived) -only one experience of poverty (deprivation) over time • Recurrent poor (or deprived) -More than one experience of poverty (deprivation) but never longer than two consecutive years • Persistent poor (or deprived) -At least three consecutive experiences of poverty (deprivation)

13. Persistent Poverty & DeprivationAll Countries

14. Cross-classification of Persistent Poverty & DeprivationAll Countries

15. Conclusions • Results support hypotheses • Class differences more pronounced as focus shifts from income only to consistent poverty; and from point-in-time to persistence • Especially for classes 7,8,9 • ESeC behaves as we would expect a good measure of class to behave • Marked country similarities, but some country differences • Outcomes for Class 5 most variable across countries • Smallholders ‘better off’ in Northern countries