By Erik Bihagen, Magnus Nermo, & Robert Erikson Swedish Institute for Social Research, SOFI,

Class Schemas and Employment RelationsComparisons between the ESeC and the EGP class schemas using European data By Erik Bihagen, Magnus Nermo, & Robert Erikson Swedish Institute for Social Research, SOFI, Stockholm University Bled 29-30 June, 2006

The purpose of this paper To compare the ESeC schema with the EGP schema. • To what extent are respondents allocated to equivalent classes with the two class schemas? • Compare empirical outcomes related to employment relationships: (1) requirements of specific human capital (SHC) (2) monitoring problems (MP)(3) age gradients in wage

Theoretical assumptions (for employees) • Both class schemas aims at grouping occupations with similarities in: • requirements of specific human capital (SHC) • levels of monitoring problems (MP) • Employees are offered long-term benefits by the employer in: • Occupations with high requirements of SHC in order to keep replacements costs low. • Occupations characterized by a high level of MP as a way to keep work incentives high. • Types of employment relationships; • Service relationship; high SHC + high MP • Labour contract; low SHC + low MP • Mixed contract; (low SHC + high MP) or (high SHC + low MP)

Data: The European Social Survey (ESS) ESS round 2 (edition 2) • 22 European countries • Sample size for employees age 20-60 with valid ISCO codes 15.772 • Class is based on 3 digit ISCO and additional information on supervisory tasks • ESeC is coded using ESeC version 4.0 • EGP is coded using a widely used algorithm (based on ISCO-88) developed by Ganzeboom & Treiman (1996 in Social Science Research) • Relevant measures of employment relations

Table 1. Seven classes of employees in EGP and ESeC Note: IIIb is here characterized by a labour contract in accordance with Goldthorpe (2000).

Figure 2. The relative class distributions for Europe (for the 22 countries included in the ESS data) 25 20 15 10 5 0

Table 2 Cross-tabulation between EGP and ESeC. All 22 countries included in the ESS data. (percent)

Two dimensions of employment relations in ESS • Specific human capital • If somebody with the right education and qualifications replaced you in your job, how long would it take for them to learn to do the job reasonably well? • Monitoring problems index • … how much the management at your work allows you to decide how your own daily work is organised? • About the work organization… My work is closely supervised

Figure 1. Expected location of ESeC classes according to theoretical assumptions regarding specific human capital and monitoring problems.

Figure 3. Location of ESeC and EGP classes according to estimated levels of specific human capital and ‘monitoring problems’ (based on estimates from OLS regressions for a person in the age of 40) for all countries in ESS 1 EGP V ESeC1 0,5 EGP I ESeC2 EGP II ESeC6 EGP VI 0 ESeC3 ESeC8 EGP IIIa ESeC7 EGP IIIb -0,5 EGP VII ESeC9 -1 -1 -0,5 0 0,5 1

Figure 4. Location of ESeC and EGP classes according to SHC and MP for Central Europe (Austria, Belgium, Switzerland, Germany, Luxembourg, Netherlands) 1 EGP V ESeC1 0,5 EGP I ESeC2 EGP II ESeC6 EGP VI 0 ESeC3 ESeC8 EGP IIIa ESeC7 EGP IIIb -0,5 EGP VII ESeC9 -1 -1 -0,5 0 0,5

Figure 5. Location of ESeC and EGP classes according to estimated levels of SHC and MP for Northern Europe (Denmark, Finland, Iceland, Norway, Sweden) ESeC2 EGP II ESeC6 EGP VI ESeC3 ESeC8 EGP IIIa ESeC7 EGP IIIb EGP VII

Figure 6. Location of ESeC and EGP classes according to estimated levels of SHC and MP for Eastern Europe (Czech Republic, Estonia, Poland, Slovenia, Slovakia, Ukraine) ESeC2 EGP II ESeC6 EGP VI ESeC3 ESeC8 EGP IIIa ESeC7 EGP IIIb EGP VII

Figure 7. Location of ESeC and EGP classes according to estimated levels of SHC and MP for United Kingdom and Ireland ESeC2 EGP II ESeC6 EGP VI ESeC3 ESeC8 EGP IIIa ESeC7 EGP IIIb EGP VII

Figure 8. Location of ESeC and EGP classes according to estimated levels of SHC and MP for Southern Europe (Spain, Greece, Portugal) ESeC2 EGP II ESeC6 EGP VI ESeC3 ESeC8 EGP IIIa ESeC7 EGP IIIb EGP VII

The proportion in ESeC 6 and the explanatory power of the ESeC class schema with six different ways of using information on supervisory status

The location of ESeC 6 depending on the number of subordinates (All 22 Countries)

Figure 9. Estimated age gradients in hourly wages, Central Europe (Belgium, Switzerland, Germany (ref cat), Luxembourg, Netherlands)

Figure 9. Estimated age gradients in hourly wages, Central Europe(Belgium, Switzerland, Germany (ref cat), Luxembourg, Netherlands)

Figure 10. Estimated age gradients in hourly wages, Northern Europe (Denmark, Finland, Norway, Sweden (ref cat))

Figure 11. Estimated age gradients in hourly wages, Eastern Europe (Estonia, Poland (ref cat), Slovakia, Ukraine)

Figure 12. Estimated age gradients in hourly wages, United Kingdom and Ireland (ref cat)

Figure 13. Estimated age gradients in hourly wages, Southern Europe(only Spain)

Figure 13. Estimated age gradients in hourly wages, Southern Europe (only Spain)

Main Findings • Striking similarities between EGP and ESeC; • a vast majority allocated in the same basic contracts • similarly associated with dimensions of employment relations • have a similar relation to ‘wage dynamics’. • But; • EGP V is troublesome in the EGP schema. ESeC 6 is more in line with our expectations throughout most of our analyses. • The most advantaged class, the higher salariat, in ESeC is smaller, and more distinct when it comes to empirical outcomes. • The explained variation of SHC, MP and wage are somewhat stronger when class is measured by ESeC than EGP.

By Erik Bihagen, Magnus Nermo, & Robert Erikson Swedish Institute for Social Research, SOFI,