1. The European Socio-economic Classification: A Summary and Explanation ESeC Validation Conference, Lisbon, January 2006 David Rose & Eric Harrison ISER University of Essex

2. Conceptual basis for the ESeC Work of John Goldthorpe Employment relations and conditions are central to delineating the structure of socio- economic positions in modern societies Twin concepts: –Asset specificity –Ease/Difficulty of monitoring

3. The Derivation of the ESeC Basic SEC Positions EMPLOYERSSELF-EMPLOYED WORKERS EMPLOYEESEXCLUDED

4. Dimensions of work as sources of contractual hazard Difficulty of monitoring Specificity of human assets low high

5. 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

6. 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

7. Dimensions of work as sources of contractual hazard, forms of contract and class locations Difficulty of monitoring Specificity of human assets low high Labour contract Service relationship mixed 6 3 1 9

8. The conceptual derivation of ESeC Basic SEC Positions EMPLOYERSSELF-EMPLOYEDWORKERSEMPLOYEESEXCLUDED LABOUR CONTRACT Form of employment regulation SERVICE RELATIONSHIP MIXED Higher prof Lower prof/ Tech OtherAgric etc Higher prof Lower prof/ Tech OtherAgric etc Higher prof Lower prof/ Tech Other Lower SupProf /Tech ManProf Man Higher Never worked LargeSmall Super- Serv- Lower routine visory/ ices technical Technician Clerical Sales Services Clerical Sales Services Professional managerial, etc Unemp- loyed 1 1 1 1 2 5 4 1 2 5 4 1 1 2 2 2 3 3 3 6 7 8 9 10 10

9. Form of Classification The outline classification takes the form of a two-level nested hierarchy, similar to classifications such as the French PCS. In its disaggregated form (level 2, what we term ‘Socio-economic Groups’ - SEGs) it covers the whole population at the individual level. SEGs to cover various ‘other active’ and inactive groups. Individuals in such groups may then be allocated to ESeC classes in a variety of ways, depending partly on analytic purpose and partly on the group concerned.

10. Current ESeC ‘Classes’ (Level 1) 1.Large employers, higher managerial and professional occupations 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 etc occupations 8.Lower technical occupations 9.Routine occupations 10.Never worked and long term unemployed

11. 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

12. 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.Not classifiable (occupations not given or inadequately described etc.)

13. Classification rules for the individual level of ESeC The ‘other unemployed’ in SEG 01, unpaid family workers in SEG 02, national service personnel in SEG 03 and the inactive SEGs 04 - 08 do not immediately collapse to any class. Rather, individuals in these groups are (re-) allocated to the group of their ‘career typical’ (usually last ‘main’) job or to their household class.

14. Number of SEGs (1) As far as the number of SEG categories to be recognised within each class is concerned, this is partly an issue of face validity, i.e. of grouping together in sub-categories similar types of occupations that share similar employment relations. It should be noted that the SEGs within this outline classification are only postulated ones, designed to help illustrate how a possible two- level classification might work.

15. Constructing ESeC For a fully operationalised ESeC we need measures of : occupation, status in employment enterprise size labour market position In addition, some measure of farm size may be necessary, too, in order to distinguish capitalist farmers from other (e.g. subsistence) farmers.

16. Occupation For the most part occupation is measured either by (4-digit) ISCO88(COM) or by a national occupational classification similar to it. France is exceptional in this regard, but has developed 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.

17. Status in employment All SECs distinguish between employers, the self- employed (own account workers) and employees. In the EU context, we may need to add the category of family worker. The EU harmonised variable is ICSE-93.

18. Number of employees The size cut-off for enterprise size in the non- agricultural sector varies across the national SECs: 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+.

19. Labour market position It is necessary to distinguish more than activity status. Our theoretical model requires us to discriminate between employers by size, the self- employed, and between managers (by size of enterprise or preferably managerial level), supervisors and other employees. Managerial status will be dependent on allocation to Major Group 1 of ISCO88(COM). Thus, labour market position involves a combination of ICSE- 93, enterprise size and supervisory status.

20. Example illustration of parts of the ESeC derivation matrix Note: in this table, for simplicity’s sake, we assume a seven-category empstat (i.e. that ‘farm’ can be established via ISCO). Employment status ISCO OUG Self-emp 10+ Self-emp <10 Self-emp none Manager 10+ Manager <10 Super- visor Employee 12xx111xx113xxx 13xxx441442X221xx 3xxx115225 xx222 3yyy115225 xx222 5xxxxx225333

21. Reduced ESeC Data sets often do not contain full information, so we can produce a ‘reduced ESeC’, derived in much the same way, except that (ignoring agriculture again) the employment status variable would only have five categories: 1.Self-employed with employees; 2.Self-employed with no employees; 3.Manager 4.Supervisor 5.Employee The ESeC category for self-employed with employees and for managers would be based on the modal employment status category for each occupation.

22. Using Fewer ISCO Digits Datasets do not always code occupation to four digits – often three or two We can construct matrices for every combination of occupation and extra information, i.e. 4 digit full, reduced, simplified 3 digit full, reduced, simplified 2 digit full, reduced, simplified

23. Timetable of Work Create derivation matrices: done Matrices + report to partners, NSIs, Eurostat and experts for responses - done Statistical Compendium – completed Validation studies – reported and presenting today! ESeC User Guide – Spring 2006 NSIs’ Workshop – Summer 2006, Bled, Slovenia

24. Request for Assistance/Participation We want continuing feedback from existing and potential users of socio-economic classifications Ongoing website at www.iser.essex.ac.uk/esecwww.iser.essex.ac.uk/esec Matrices and syntax available: Contact rosed@essex.ac.uk or ekharr@essex.ac.uk.rosed@essex.ac.uk ekharr@essex.ac.uk