Developing a European Socio-economic Classification: Why, What and How iser.essex.ac.uk/esec

1. Developing a European Socio-economic Classification:Why, What and How www.iser.essex.ac.uk/esec David Rose & Eric Harrison Institute for Social and Economic Research University of Essex

2. The ESec • Why does anyone want an ESeC? • What is the ESec anyway? • We already have ISCO88 (08) – what is different about ESec? • How do you go about creating ESeC and what do we need?

3. Why do we want an ESeC? • Eurostat Statistical Harmonisation programme • Much ‘comparative’ research just uses national statistics from different countries • Need to create common set of core: • units • variables and • classifications

4. ESeC • Expert Group appointed by Eurostat in January 2000 • Proposals for an ESeC made in 2001 Feasibility Report (available from www.iser.essex.ac.uk/esec) • This report forms the basis for the project

5. Form of classification Outline classification is two-level ‘nested hierarchy’ (see French PCS) Level 1 – nine (ten) classes, reduces to five or three Level 2 – thirty-five (forty four) socio-economic groups’ (SEGs) This covers the whole population at the individual level. Includes all the various ‘other active’ and ‘inactive’ groups.

6. What does the ESeC measure? • Rooted in long traditions within the study of social stratification in European sociology • Employment relations and conditions are central to delineating the structure of socio-economic positions in modern societies

7. What does the ESeC NOT measure? • Skill • Education • Status or Prestige • Job Complexity

8. Basic SEC Positions EMPLOYERS SELF-EMPLOYED WORKERS EMPLOYEES EXCLUDED Classifying the European Labour Force

9. Distinguishing among Employees • Over 80 per cent of workforce ‘employees’! • Differentiate them in terms of employment relations: • Do they have a ‘labour contract’ or a ‘service relationship’? Or a mixture of the two?

10. Typical elements of the Labour Contract • 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

11. Typical elements of the Service Relationship • 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

12. Possible ESeC ‘Classes’ (Level 1) • Large employers, higher managerial and professional occupations • 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 sales and lower services occupations • Lower technical occupations • Routine occupations • Never worked and long term unemployed

13. Underlying ESeC ‘Socio-economic Groups’ (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 professional occupations

14. Flexibility 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?

15. Extra Socio-economic Groups Other active groups 01 Other unemployed 02 Unpaid family workers 03 National service Inactive groups 04 Retired 05 Students (full-time) 06 Children 07 Permanently sick and disabled 08 Looking after home Not classifiable 00 Occupation not given or inadequately described

16. What do we do with those leftover? individual level of ESeC • Those in SEGs 01-08 do not automatically collapse to any class. Individuals in these groups are re-allocated to either: • Their ‘career typical’ (usually last ‘main’) job or • their household class.

17. Household Level Rules • Also possible to re-allocate all SEGs to create a Household version of ESeC • Achieved through the concept of ‘household reference person (HRP) • Usually a given, i.e. part of survey design • But if occupational data on all HH members is available, use ‘dominance’ rules

18. What do we need to make an 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, labour market position and (in some cases) enterprise size. In many countries a measure of farm size may also be necessary

19. Occupation Measured by ISCO88 (COM) at (up to) 4 digits or a national occupational classification similar to it. Exception is France, but has 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.

20. Status in Employment All classifications distinguish between employers, the self-employed (own account workers) and employees. The EU harmonised variable is ICSE-93. ICSE-93: • Employees • Employers • Own account workers • Members of producers’ co-operatives • Contributing family workers • Workers not classifiable by status

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

22. Number of Employees or Size of Enterprise • The size cut-off for enterprise size in the non-agricultural sector varies across the national SECs and across datasets: 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+.

23. What do we do with the data? • Construct a matrix or lookup table • Rows are ISCO OUGs • Columns are employment status or managerial or supervisory position • E.g. 7124 (carpenters) • Self-employed = class 4 • Supervisors = class 6 • Employees = class 8

24. ESeC in a world of incomplete information • Some data sets may not contain all the elements required to create ESeC in the prescribed manner. • ECHP: (2 digits ISCO or less – anonymity) • ESS: • French occupations 2 digits • Norwegian self-employed no occupation code

25. But ESeC can cope! • ‘Full’ version: Occupation (4 digits), employment status, mangerial and supervisory positions, establishment size • ‘Reduced’ version: no data on firm size • ‘Simplified’ version: just occupational data, cases got to typical class for that OUG

26. Using Fewer ISCO Digits • Datasets do not always code occupation to four digits – often three or two • We have a ‘matrix’ or lookup table with every possible ISCO code: • E.g. 2000, 2100, 2140, 2141

27. Timetable of Work • Create derivation matrices: done • Matrices + report to partners, NSIs, Eurostat and experts for responses - done • Statistical Compendium – being undertaken • Validation studies – in progress, reporting November 2005 • Validation conference – January 2006 • ESeC User Guide – Spring 2006 • NSIs’ Workshop – Summer 2006

28. Request for Assistance/Participation • We want feedback from existing and potential users of socio-economic classifications • Matrices and syntax available: • Contact rosed@essex.ac.uk or ekharr@essex.ac.uk.