Socioeconomic status (SES) is a measurement used by economists and sociologists. The measurement combines a person's or their family's economic or wealth level and social position (generally determined by education level) in relation to others.
In common parlance, "socioeconomic status" is synonymous with social class.Princeton University. "Social class" . WordNet Search 3.1. Retrieved on: 2012-01-25. However, academics distinguish social class from socioeconomic status, using the former to refer to one's relatively stable cultural background and the latter to refer to one's current social and economic situation, which is consequently more changeable over time.
When analyzing a family's SES, the household income and the education and occupations of its members are examined, whereas for an individual's SES only their own attributes are assessed. Recently, research has revealed a lesser-recognized attribute of SES as perceived financial stress, as it defines the "balance between income and necessary expenses". Perceived financial stress can be tested by deciphering whether a person at the end of each month has more than enough, just enough, or not enough money or resources. However, SES is more commonly used to depict an economic difference in society as a whole.National Center for Educational Statistics. 31 March 2008. http://nces.ed.gov/programs/coe/glossary/s.asp. Archived.
Socioeconomic status is typically broken into three levels (high, middle, and low) to describe the three places a family or an individual may fall into. When placing a family or individual into one of these categories, any or all of the three variables (income, education, and occupation) can be assessed.
Education in higher socioeconomic families is typically stressed as much more important, both within the household as well as the local community. In poorer areas, where food, shelter and safety are a priority, education is typically regarded as less important. Youth in poorer households are particularly at risk for many health and social problems in the United States, such as unwanted pregnancies, addiction, drug abuse, diabetes and obesity.
Additionally, low income and education have been shown to be strong predictors of a range of physical and mental health problems, including meningitis, respiratory viruses, arthritis, coronary disease, psychosis, and schizophrenia. These problems may result from environmental conditions at home or in the workplaces, or using the social causation model where disability or mental illness, may be the precursor leading to a person's social status including freedoms and liberties.
Important factors Income
Income refers to wages, salaries, profits, rents, and any flow of earnings received. Income can also come in the form of unemployment or worker's compensation, social security, pensions, interests or dividends, royalties, trusts, alimony, or other governmental, public, or family financial assistance. It can also come from monetary winnings, like lotteries and other games or contests where money is awarded as a prize.
Income can be looked at in two terms: relative and absolute. John Maynard Keynes's absolute income hypothesis predicts that as income increases, so will consumption, but not at the same rate. Relative income dictates a person's or family's savings and consumption based on the family's income in relation to others. Income is a commonly used measure of SES because it is relatively easy to figure for most individuals.
Income inequality is most commonly measured around the world by the Gini coefficient, where 0 corresponds to perfect equality and 1 means perfect inequality. Low-income families focus on meeting immediate needs and do not accumulate wealth that could be passed on to future generations, thus increasing inequality. Families with higher and expendable income can accumulate wealth and focus on meeting immediate needs while being able to consume and enjoy luxuries and weather crises.Boushey, Heather and Weller, Christian. (2005). Inequality Matters: The Growing Economic Divide in America and its Poisonous Consequences.. "What the Numbers Tell Us." Pp 27-40. Demos.
Education Education also plays a role in determining income. Median earnings increase with each level of education. Higher levels of education are associated with better economic and psychological outcomes (i.e.: more income, more control, and greater social support and networking).
Education plays a pivotal role in skillsets and cultivating specific qualities that stratify people with higher SES from lower SES. Parents from lower SES households have been observed as being more likely to give orders to their children in their interactions while parents with a higher SES are more likely to encourage questioning in their children in the interest of fostering critical thinking. Research has shown how children who are born in lower SES households have weaker language skills compared to children raised in higher SES households. These language skills affect their abilities to learn and thus exacerbate the problem of education disparity between low and high SES neighborhoods.Lareau, Annette. (2011). Unequal Childhoods: Race, Class, and Family Life. University of California Press
Research shows that lower SES students have lower and slower academic achievement as compared with students of higher SES.Staff (2012) "Education & Socioeconomic Status" American Psychological Association This may be attributed to the abundance of resources available to the upper and upper middle class school districts and parents, while the equivalent in areas which are predominantly lower-middle/working class do not have the resources (for staffing quality teachers, updating textbooks, providing free tutoring or counseling for students who need it in order to succeed at school, etc.).
Female education
Occupation Occupational prestige, as one component of SES, encompasses both income and educational attainment. The occupational status reflects the educational attainment required to obtain the job and income levels that vary with different jobs and within ranks of occupations. Additionally, it shows achievement in skills required for the job. Occupational status measures social position by describing job characteristics, decision-making ability and control, and psychological demands on the job.
Occupations are ranked by the Census (among other organizations) and opinion polls from the general population are surveyed. Some of the most prestigious occupations are physicians and surgeons, lawyers, chemical and biomedical engineers, university professors, and communications analysts. These jobs, considered to be grouped in the high SES classification, provide more challenging work and greater control over working conditions but require more ability. The jobs with lower rankings include food preparation workers, counter attendants, bartenders and helpers, dishwashers, janitors, maids and housekeepers, vehicle cleaners, and parking lot attendants. The jobs that are less valued also offer significantly lower wages, and often are more laborious, very hazardous, and provide less autonomy.
Occupation is the most difficult factor to measure because so many exist, and there are so many competing scales. Many scales rank occupations based on the level of skill involved, from unskilled to skilled manual labour to professional, or use a combined measure using the education level needed and income involved.
In sum, the majority of researchers agree that income, education and occupation together best represent SES, while some others feel that changes in family structure should also be considered.Milne, A., & Plourde, L. A. (2006). Factors of a Low-SES Household: What Aids Academic Achievement? SES affects students' cognitive abilities and academic success. Several researchers have found that SES affects students' abilities.
Other variables
Wealth
Wealth, a set of economic reserves or assets, presents a source of security providing a measure of a household's ability to meet emergencies, absorb economic shocks, or provide the means to live comfortably. Wealth reflects intergenerational transitions as well as accumulation of income and savings.MacArthur Research Network on SES and Health. 31 March 2008.
Income, age, marital status, family size, religion, occupation, and education are all predictors of wealth attainment.
The wealth gap, like income inequality, is very large in the United States. There exists a racial wealth gap due in part to income disparities and differences in achievement resulting from institutional discrimination. According to Thomas Shapiro, differences in savings (due to different rates of incomes), inheritance factors, and discrimination in the housing market lead to the racial wealth gap. Shapiro claims that savings increase with increasing income, but African Americans cannot participate in this, because they make significantly less than Americans of European descent (whites). Additionally, rates of inheritance dramatically differ between African Americans and Americans of European descent. The amount a person inherits, either during a lifetime or after death, can create different starting points between two different individuals or families. These different starting points also factor into housing, education, and employment discrimination. A third reason Shapiro offers for the racial wealth gap are the various discriminations African Americans must face, like redlining and higher interest rates in the housing market. These types of discrimination feed into the other reasons why African Americans end up having different starting points and therefore fewer assets.Shapiro, Thomas. (2004). The Hidden Cost of Being African American: How Wealth Perpetuates Inequality. Oxford University Press.
Effects
Health
Recently, there has been increasing interest from epidemiologists on the subject of economic inequality and its relation to the health of populations. Socioeconomic status has long been related to health, those higher in the social hierarchy typically enjoy better health than those below. Socioeconomic status is an important source of health inequity, as there is a very robust positive correlation between socioeconomic status and health. This correlation suggests that it is not only the poor who tend to be sick when everyone else is healthy, but that there is a continual gradient, from the top to the bottom of the socio-economic ladder, relating status to health. Parents with a low socioeconomic status cannot afford many of the health care resources which is the reason that their children may have a more advanced illness because of the lack of treatment. This phenomenon is often called the "SES Gradient" or according to the World Health Organisation the "Social Gradient". Lower socioeconomic status has been linked to chronic stress, heart disease, ulcers, type 2 diabetes, rheumatoid arthritis, certain types of cancer, and premature aging.
There is debate regarding the cause of the SES Gradient. Researchers see a definite link between economic status and mortality due to the greater economic resources of the wealthy, but they find little correlation due to social status differences.