Socioeconomic status (SES) is the relative position of a family or individual along a hierarchical social structure, based on access to, or control over, wealth, prestige, and power. It is used to measure social class and social status. It is usually operationalized as a composite measure of income, level of education, and occupational prestige. Although these indicators of SES are separable, they tend to be correlated. In many ways, SES categories are archetypal “status groups”— categories of people with unequal amounts of prestige.
The status-attainment model, in stratification research, generally estimates the effects that individuals’ socioeconomic origins, and other attributes, have on their life chances, specifically on occupational status. The model provides a parsimonious summary of the ways in which socioeconomic origins affect socioeconomic outcomes.
The model was initially developed by Peter Blau and Otis Duncan in their classic 1967 work, The American Occupational Structure, in which they demonstrated that SES of family of origin serves as a foundation for future occupational achievement. Family SES was found to affect the quality and quantity of education received, which affected career beginnings, and ultimately, occupational achievement. Subsequent studies validated and expanded on these findings. Later work also identified or explored limitations; for example, the model does not fully explain the gender wage gap, and family SES has been shown to have limited returns for African Americans.
Components Of SES: Wealth And Housing
Wealth is an important component of SES but has often been overlooked in empirical research. Wealth confers advantages by providing a base of financial security, protecting against downturns in incomes, covering brief periods of unemployment, and helping to avert business losses (for example among struggling entrepreneurs). Up to 80 percent of capital accumulation can be attributed to intergenerational transfers of wealth. This is greater than the effect of parental income.
Owning one’s home is the primary mechanism of equity accumulation for most families in the United States. Parents may use wealth, often in the form of property, to finance their children’s educational and professional credentials. Housing is an important material mechanism by which socioeconomic advantage is passed on from one generation to the next. Home ownership is also salient to educational attainment in that the quality of the local school district is determined by the local tax base. Equity in a home may play an important role in financing postsecondary education (e.g., by providing a second mortgage to pay for college). Home ownership is also often cheaper in the long run than renting, so funds are freed up to finance education.
Links Between SES And Occupational Outcomes
The cultural environment, including the immediate family environment and the surrounding community, influences norms and values. The environment provides norms and practices that affect entrance to and progression in professional careers. It has been shown, for example, that students who attend high SES schools are less likely to drop out of high school, and that girls who attend high SES schools are less likely to have a child before graduation, than are students with the same family background who attend low SES schools.
Human capital includes the cumulative educational, personal, and professional attributes and experiences that might enhance an employee’s value to an employer. The children in disadvantaged environments tend not to realize their potential for intellectual development, an important component of human capital. Disadvantaged environments tend to suppress the influences of heritability.
Level of education is the most heavily researched human capital attribute. Blau and Duncan concluded that the impact of family background on SES works largely through the schooling system. Research from the careers literature indicates that returns from educational attainment in terms of pay and promotions are significant. Schooling increases the human capital attribute of intellectual development and therefore the earnings of even those children with the lowest ability levels. However, not only is the quality of schooling important to later career success, but so is the timing of the education.
Life-course-timing differences in educational attainment help explain wage differentials by midlife. Advantaged social origins lead to early postsecondary completion of degrees, which in turn yields higher wages. Advantaged men and women have parental, social, and economic resources that facilitate entry into high-quality postsecondary school tracks early in life for their children or enable their children to remain in educational institutions long enough to earn bachelor’s and graduate degrees prior to market entry. This process is sequential and cumulative in its effects on wage gains. A pathway of cumulative disadvantage is also evident: the least advantaged exit schooling early in life, do not return as adults, and earn low wages.
Social and Cultural Capital
SES is linked to social capital. Social capital is defined as the social networks, the reciprocities that arise from them, and the value of these reciprocities for achieving mutual goals. Children benefit from continued exposure to the social connections that parents have with others outside the family group, such as neighbors, school personnel, or work colleagues. For example, youths with well-connected parents and teachers tend to have choices in selecting work. If a youth’s relatives are unemployed and their teachers lack job contacts, their choices are restricted to other kinds of contacts (such as peers) that do not lead to long-term earnings benefits.
An educational institution may confer three types of capital on its graduates: scholastic capital, which is one type of human capital and represents the amount of knowledge acquired; social capital in the form of personal contacts and network ties; and cultural capital or the value of its prestige. Ivy League schools, which represent very high-status schools in the United States, are beneficial in conferring social and cultural capital on graduates. It is also possible that graduates from these schools in the United States benefit from nepotism or favoritism.
Compensating For Low SES
Childhood social class differences cannot be completely overcome or compensated for by later life course circumstances, so a recommendation is to increase the transfer of social resources targeting children. Public policies responsible for early intervention programs such as Head Start are believed to make the social environment of these children more conducive to intellectual development. More accessible and higher quality job information and placement centers could also enhance employment and income.
Families could improve their SES and raise their children’s chances of upward mobility if public policy and practice expanded opportunities for long-term financial gains in wealth. These opportunities could include increased education about investment opportunities, more extensive investment incentives, wider use of pension plans for companies and businesses, and increased home-buying incentives.
Occupational Status Versus Subjective Career Success
The links between SES and career-relevant indicators are typically based on studies that measure occupational status. These measures of occupational status are based on the prestige standing of occupations, the educational levels of occupational incumbents, and the income levels of occupational incumbents. By contrast, there is an extensive career development literature that measures career success using subjective measures such as satisfaction with career and with facets of the current position. While these studies offer a finer textured, intraindividual understanding of the experience of career development and success than stratification studies, they typically do not include SES as a predictor. At this point, then, there is little information on the link between SES and subjective career success.
- Career investments
- Family background and careers
- Impression management
- Occupational prestige
- Social capital
- Blau, P. 1992. “Mobility and Status Attainment.” Contemporary Sociology 21:596-598.
- Blau, P. and Duncan, O. D. 1967. The American Occupational Structure. New York: Free Press.
- Corcoran, M. 1992. “Background, Earnings, and the American Dream.” Contemporary Sociology 21:603-609.