Developing a European Socioeconomic Classification: Why, What and How www'iser'essex'ac'ukesec

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Developing a European Socio-economic
ClassificationWhy, What and How
www.iser.essex.ac.uk/esec

• David Rose Eric Harrison
• Institute for Social and Economic Research
• University of Essex

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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?

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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

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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

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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.

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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

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What does the ESeC NOT measure?

• Skill
• Education
• Status or Prestige
• Job Complexity

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Classifying the European Labour Force
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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?

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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

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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

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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

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Underlying ESeC Socio-economic Groups (Level 2)
Class 1 Large employers, higher managerial and
professional occupations

• 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

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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?

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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

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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.

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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

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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

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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.

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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

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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.

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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.

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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

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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

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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

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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

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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

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Request for Assistance/Participation

• We want feedback from existing and potential
  users of socio-economic classifications
• Matrices and syntax available
• Contact rosed_at_essex.ac.uk or ekharr_at_essex.ac.uk.