FOTO: ANGEL NIETO

Recently published in European Sociological Review, the study is the product of collaboration between researchers from Switzerland and Sweden, notably Daniel Oesch (University of Lausanne), Oliver Lipps (FORS), Roujman Shahbazian (Uppsala University and SOFI), Erik Bihagen (SOFI), and Katy Morris (SOFI and University of Lausanne).

–Income data is often missing or incomplete, particularly in survey data, says Katy Morris, one of the co-authors. By ranking occupations according to their earning potential, OEP offers a way of understanding the income position of people who are currently working, as well as the past labour income of people who are retired and the future earning potential of those still in education, based on their occupational aspiration.

A New and Transparent Measure

Unlike older scales that combine education, income, and age into difficult-to-interpret indexes, OEP is based on a single, easily understandable measure. The OEP scale measures the median income of full-time employees within ISCO occupations and expresses them as a percentiles in the income distribution. An occupation with a value of 75 therefore ranks above 75 percent of all full-time workers in the income distribution.

–OEP does not measure an individual’s actual income, but rather the typical earnings potential of people in a given occupation. A lawyer working pro bono will still have a high OEP because the occupation is, on average, well-paid. Likewise, a truck driver will have a lower OEP even if the person works substantial overtime, says Erik Bihagen, one of the co-authors.

The measure is based on national survey and register data from five countries – including Sweden – and shows that occupational hierarchies are remarkably stable over time and between countries. This makes it possible to use a common international scale, which researchers can construct using Stata (crosswalk) and R (DIGCLASS) packages.

OEP is stable over time and across countries. This shows that societies reward occupations in similar ways, regardless of context, says Morris.

Easy to Use – Even Outside Academia

Unlike previous occupation-based indexes, such as ISEI or SIOPS, OEP is both easier to interpret and easier to use in practice. For example, the measure shows that preschool and primary school teachers are at the 47th percentile, while physicians are at the 91st percentile, which directly indicates the occupation’s typical position in the income distribution.

–A major problem with existing indexes is that they are difficult to interpret and rarely used outside sociology. We believe OEP could also become a tool for economists, political scientists, journalists, and public agencies, says Roujman Shahbazian, one of the co-authors.

Relevance for Inequality and Mobility

OEP can be used to study intergenerational social mobility, but it also works for analyzing careers and young people’s future aspirations, providing a clear link to the income distribution even when income data is missing.

–We see it as a new tool in the toolkit for researchers who want to understand how life chances are distributed. It is simple, clear, and based on available data, concludes Bihagen.

More About the Study

The study is peer-reviewed and published in the European Sociological Review.
The aim of the study is to develop a new, simple, and intuitive measure of an occupation’s position in the social hierarchy, based on its earnings potential – that is, the typical income for full-time employees in a given occupation, expressed in percentiles within the total income distribution of the population. For example: an occupation with an OEP value of 80 means that its median income is higher than 80 percent of other full-time workers.

To construct the measure, large, representative datasets from five Western countries were used: Sweden, Germany, the United Kingdom, Switzerland, and the USA. In Sweden, the data is based on administrative registers for the period 1970–2021. To make international comparisons possible, each country’s occupational codes were converted to the international standards ISCO-88 and ISCO-08, at four levels of detail (1–4 digits). The final OEP scale is based on full-time employees aged between 25 and 60 years.

Contact

Erik Bihagen, The Swedish Institute for Social Research (SOFI)

Katy Morris, The Swedish Institute for Social Research (SOFI)