The class origin pay gap: Seeing a class ceiling

Laurison and Friedman graph

UK Labour Force Survey July-October 2014 quarterly data, N=3377.

by Daniel Laurison and Sam Friedman

How “sticky” is your class of origin? That is, how much does the class you’re born in affect where you end up?

This is the question sociologists of social mobility seek to answer, and they almost always do it by looking at the association between parents and children on one measure of class position – occupation. Decades of this research show that social origin is a strong predictor of life outcomes – that is, there is much less intergenerational mobility than there would be if one’s class origin had no effect on one’s class destination.

But one limitation of this work is that it tends to assume that a person’s trajectory ends at the point they enter an occupation.

In our recent study, we take a different approach by looking at earnings among those in high-status jobs. We show that even when those from working-class backgrounds secure admission into Britain’s elite occupations, they don’t necessarily go on to achieve the same earnings as those from more privileged backgrounds. In other words, workers in the higher managerial and professional occupations experience a “class pay gap.”

Our analysis draws on data from the 2014 Labour Force Survey, Britain’s largest employment survey – which contains a sample of 95,950. Here we begin by identifying respondents in the occupations that make up Class 1 of the UK Government’s National Statistics Socio-Economic Classification – often defined as Britain’s elite jobs (e.g. doctors, lawyers, CEOs, academics, architects, etc.). We then look at the class origins of those in these occupations, and most importantly how their income varies according to their background.

This analysis shows that those whose parents were in working class jobs earn 17%, or about £7350 per year, less than those in similar jobs whose parents were in higher professional or managerial positions. Controlling for a host of factors known to affect earnings, such as educational attainment, job tenure and firm size, does reduce this gap in important ways.  But as the figure above illustrates, even after accounting for these factors, the class-origin pay gap remains 9-10% or about £5500.

Specifically, the figure shows the average predicted earnings for people in the UK’s top jobs, across four class origins. The class-origin groups are based on the occupation of the main income-earning parent in their household when respondents were 14 years old.

The long-range mobile (purple) are those whose parents are poor or working class: they either had no income, or worked in routine or semi-routine occupations (e.g. truck driver, cleaner, factory worker, or retail salesperson). The mid-range mobile (blue) are those from intermediate or lower middle-class backgrounds: their parents were self-employed in small businesses, or had jobs such as customer service, nursing assistant, electrician, or bookkeeper. The short-range upwardly mobile (yellow) are the children of teachers, nurses, and store managers; and the intergenerationally stable (red) had parents in the same kinds of jobs they themselves occupy.

While this figure and the paper were based on 2014 data, we’ve added 2015 and 2016 surveys to our analysis and found essentially the same patterns: those whose parents were in higher-status, higher-earning occupations tend to earn substantially more than people who are similar in every way we can measure using this dataset, but come from less-advantaged class backgrounds. This, we argue, points to a worrying and previously undetected “class ceiling” within Britain’s elite occupations.

We also find that Britain’s class pay gap is more acute for certain social groups. Upwardly mobile women, for example, face a clear double disadvantage – earning on average 21% less than privileged men. We also find a similar double penalty for many people of colour from working-class backgrounds – particularly those of Black African, Black Caribbean, Pakistani and Bangladeshi origin.

Most recently, we have uncovered that the class ceiling has an important spatial dimension; namely a strong “London Effect”. Despite the dominant policy narrative in the UK, which presents London as the national “engine-room” of social mobility, our findings suggest that the class pay gap is actually most severe in the capital. Those from working-class backgrounds who work in top jobs in central London earn, on average, £10,500 less per year than their privileged-origin colleagues. Much of this is driven, we find, by the City of London’s banking and finance sector, which appears to represent the distinct spatial and sectoral apex of the class pay gap.

Explaining the class-origin pay gap

How might we explain this “class ceiling”?  There are two sets of answers to this question – those we can get from our data and those we are currently investigating.

In our work, we examine each of the control variables mentioned above and analyse how much each of these differences between working-class-origin and privileged-origin people explain the class pay gap (that £7350) between the two groups.

We find three big sources of earnings differences. (1) Education: working-class origin people have less education on average than those from better-off backgrounds.  (2) Location: privileged-origin people are far more likely to work in London and in large firms, where salaries are much higher. (3) Sorting: working-class origin people are less likely to be found in the highest-status and highest-salaried occupations in the UK’s top class.

For example, while about 35% of UK workers have working-class origins, and about 18% of those in top jobs overall come from these backgrounds, only 5% of doctors, and only about 10% of CEOs, grew up working class.  Taken together, these differences between those who have experienced substantial upward social mobility and their privileged colleagues explain about half of the class-origin pay gap.

Investigating what might be driving the other half, the unexplained earnings difference, is the focus of our current efforts. In particular, we are conducting in-depth occupational case studies of architecture, television, accountancy and acting. Here, drawing on other research, we believe there are many likely explanations.

As Lauren Rivera’s excellent book Pedigree demonstrated in a US context, and Louise Ashley has shown in the UK, class-linked differences in cultural capital, such as private and elite schooling and comfort with dominant cultural norms and tastes, certainly play a role. So too does social capital, having connections to people who can help advance one’s career. It is likely also that parents who are higher professionals or managers provide direct economic help to that can advance their children’s careers, such as by paying for housing so that their kids can take unpaid internships in London.

There are other mechanisms that are less well-documented (so far) but also likely play a role: working-class origin people may specialize in less-lucrative areas of their chosen fields, either because these appeal to them more, or because they didn’t have the familiarity with the field to understand the pay and prestige differences between, say, plastic surgery and general practice in medicine, or economics and sociology in academia.

And last but certainly not least, some of the pay gap we find may be due not only to the kinds of implicit discrimination outlined by Rivera and Ashley, but also more overt forms – gatekeepers may not hire or promote working class people simply because of prejudices towards working-class origin people, such as beliefs that they have lower IQs, or a weaker work ethic.

Moving forward we think the class pay gap highlights the need for research into intergenerational transmission of advantages that moves beyond single-variable definitions of “class position.”  Class is clearly not only one’s occupation, however measured or aggregated, nor is it only one’s earnings or education. All of these combine with other kinds of resources (or capitals), many of them gained (or not) in growing up a certain class, to determine one’s life chances and social position.  As we say in our article, a “Glasgow-based lawyer earning £50,000/year whose parents were factory workers is not meaningfully in the same class destination as a City of London lawyer earning £75,000, raised in a family of lawyers.”

Daniel Laurison is an Assistant Professor of Sociology at Swarthmore College.  Sam Friedman is an Associate Professor of Sociology at the London School of Economics.

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