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

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

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)

Derivation of ESeC Basic SEC Positions EMPLOYERSSELF-EMPLOYED WORKERS EMPLOYEESEXCLUDEDService Contract Mixed Contract Labour Contract Monitoring problems Asset specificity

ESeC Classes (Level 1) 1.Large employers, higher managerial & professional 2.Lower managerial and professional occupations 3.Intermediate occupations 4.Small employers and own account workers 5.Employers and self-employed in agriculture 6.Lower supervisory and lower technician occupations 7.Lower services & sales occupations 8.Lower technical occupations 9.Routine occupations 10.Never worked and long term unemployed* * We reserve class 10 for ‘never worked’

Distribution of ESeC (v4, ECHP, Wave 1)

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

Method ECHP, 1994 and 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)

Indicators of Life-Style and Deprivation 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 In arrears on rent, utilities, HP Weighted CLSD

Risk of Income Poverty and Deprivation All Countries, Log Ratio to Average

Illustrated Country Differences Consistent Poverty

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)

Persistent Poverty & Deprivation All Countries

Cross-classification of Persistent Poverty & Deprivation All Countries

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