Working Paper Series
The JRC Working paper series on Social Classes in the Digital Age (DCLASS) addresses socioeconomic and policy questions related to the role of social classes in contemporary societies, with a particular focus on the challenges posed by technological transformations. The working paper series welcomes original contributions from different disciplines, including sociology, economics and political science. In addition, both original theoretical and empirical contributions are welcome.
Working papers are useful to communicate and disseminate to a broad audience the preliminary research findings of the work developed by the team and external contributions to generate discussion and attract critical comments for further improvements. Therefore, the working papers are considered work in progress and are subject to peer-review (internal and external).
Working papers are published with a free licence, and authors can, of course, reuse the material for publication in academic journals.
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All submissions should be in English and sent to JRC-CAS-DIGCLASS@ec.europa.eu with "Working Paper Series Submission" as the subject.
Authors: GIANGREGORIO Luca, VILLANI Davide
Abstract: This paper studies income distribution and inequality in Germany, Spain and Italy by applying the approach described in Fana and Villani (2022a). This framework provides a novel classification of labourers and capitalists that considers some features of contemporary capitalism, namely the fact that individuals/households can receive multiple types of incomes and the role of managers in shaping class belonging. First, we perform a decomposition of the Gini index to study which sources of income contribute to inequality. A marginal increases in wages would contribute to the reduction of the overall level of inequality, while profits and property income augment it. Furthermore, only the growth of wages received by labourers would help to lower inequality, whereas those received by capitalists would increase it. Second, we discuss how our approach links to the literature on wages at the top of the distribution of income, assessing whether the growth of wages at the top of the distribution of income is evident in our dataset and we explore who receives these wages at the top of the distribution of income. We find that there is a growing presence of wages at the top of the distribution on income. However, this growth corresponds mostly to wages received by what we call capitalists, not labourers. We conclude that despite a linear correspondence between income source and class location is more blurred today than it was 200 years ago but, nonetheless, a class divide is still clear, at least in the three countries analysed.
Authors: BÜRGISSER Reto
Abstract: The rise of new technologies has been a defining feature of advanced capitalist countries over the last decades, reigniting concerns about the future of work, rising inequality, and technological unemployment. While there is little doubt that rapid technological progress has far-reaching economic, social, and political consequences, little is known about viable and effective policies governments can implement to assist workers and communities in adjusting to a fast-changing economic landscape and rising labor market insecurity. This paper focuses on the ability of public policies to moderate technology-induced labor market vulnerability and its well-documented political downstream consequences. First, I suggest to theoretically classify policy responses according to their intended goal into a three-fold typology, distinguishing between investment, steering, and compensation policies. After that, I provide a detailed discussion on the current state of the empirical literature how such policy responses affect workers coping with technological change. In the last section, I discuss to what extent these findings can guide the adoption of policies to help workers adapt to technological change and point out potential avenues for future research.
2023/03 Socioeconomic differences in access to and use of Medically Assisted Reproduction (MAR) in a context of increasing childlessness
Authors: SEIZ Marta, EREMENKO Tatiana, SALAZAR Leire
Abstract: The WHO estimates that around 186 million individuals live with infertility. Although the drivers of infertility are varied and complex, it is linked to the postponement of childbearing in Western countries, and unsafe abortions and deficits in maternal health in less affluent societies. The development of Medically Assisted Reproduction (MAR) has attracted increased attention of both researchers and the wider public. This report summarizes research on MAR and examines the main drivers behind its development, as well as the different contexts in which it takes place, and the main socioeconomic variables underlying variations in access and usage. We focus more specifically on Europe, where MAR is more extensively regulated, but also more widespread compared to other regions. The first section contextualises the emergence and increasing use of MAR from a sociodemographic perspective and describes the major fertility-related transformations and the socioeconomic correlates behind these trends. The second section engages with the phenomenon of infertility, providing evidence of its prevalence and underlying drivers from a biological and an environmental perspective. The third section provides an overview of MAR treatments offered and their regulation and use across countries, as well as the role of macro- and micro-level factors in explaining these variations. Lastly, the report discusses the implications and challenges posed by the development of MAR in contemporary societies.
Authors: JAIME-CASTILLO Antonio M., FERNÁNDEZ Juan J.
Abstract: The self-interest approach to preferences for redistribution draws upon the idea that socio-economic conditions influence policy preferences via personal interests. Following this principle, a burgeoning interdisciplinary literature has examined the influence of socio-economic status (SES) on redistributive preferences. Yet this body of research is quite fragmented because it includes a plethora of understandings of SES and there is still no consensus on which conceptualization best accounts for variation in these preferences. We fill this gap in the literature through an analysis of the predictive validity of seven conceptualizations of SES: (i) income as a linear measure; (ii) income measured in deciles; (iii) skills specificity; (iv) ESeC schema; (v) Kitchelt-Rehm’s class schema; (vi) risk of unemployment; and (vii) routine task intensity. Using data from the European Social Survey for 24 countries in 2012-2018, we determine the predictive validity of each conceptualization through measures of goodness of fit that prove sensitive to explanatory power and parsimony of the models. The results show that linear income constitutes the conceptualization with highest predictive validity in 14 of the 24 countries. The approaches of the risk of unemployment and skills specificity display lower validity than income but higher than that of the ESeC, Oesch and Kitchelt-Rehm class schemas.
Authors: BICCHI Nicolas, KUO Alexander, GALLEGO Aina
Abstract: What policies do individuals prefer in response to the labor market risks related to the ongoing processes of digitalization and automation? To what extent does being exposed to different forms of “technological risk” condition such preferences? In this paper, we advance existing research on this topic by distinguishing between three main dimensions of technological risks (general concern about negative impacts, concern about tasks in one’s job being automated, and technostress) and preferences for three types of policies related to these risks (compensation, retraining, and protectionist policies intended to slow down or prevent technological change). Using new survey evidence from Spain, we find little evidence that technological risks matter for preferences for compensation or retraining, but they do condition support for protectionist policies. We conclude with implications for politics in the current context of rapid digitalization.
2022/07 Is it all the same? Types of innovation and their relationship with direct control, technical control and algorithmic management across European firms
Authors: FANA Marta, VILLANI Davide
Abstract: Using firm-level data from 28 European countries, this paper explores the relationship between two types of innovation (process and digital) and different forms of control (direct and indirect) at the workplace. We find that (1) digital innovation is more common than process innovation; (2) more innovative firms record higher levels of indirect control (especially related to algorithmic management) and lower level of direct control (3) the relationship between innovation and control is not uniform across European countries. These findings nurture the debate on the future of work as the process of digitalisation may promote a shift towards indirect forms of control and contribute to reduce the degree of direct control. Moreover, these changes may also affect the bargaining process and lead to a redefinition of managerial roles, though it should be acknowledged that social and institutional factors play an important role in shaping this process.
Authors: ESTEVE MORA Fernando, MUÑOZ DE BUSTILLO LLORENTE Rafael
Abstract: The aim of this paper is to present a novel proposal to define social classes from the economic perspective. This paper draws on a previous working paper (Muñoz de Bustillo and Esteve, 2022) that discusses the demise of the concept of social classes in economic analysis derived from the triumph of Neoclassical Theory, its substitution in recent times by the definition of social classes based on ad-hoc aggregation of deciles of people in the income distribution, and the convenience to explore new ways of defining social classes from an economic perspective. The proposal presented in this paper regarding social classes is based on two different elements. The first one is the participation or exclusion of a given person from the economic surplus. The second one is its position, both in terms of income and consumption, in relation to the necessary consumption, C*, and average income, Y. These concepts allow defining three different social classes: Low, Middle and High, that can be further divided in subclasses up to a total of seven. A second, and less developed part of the paper reviews the role of economic power in explaining the allocation of different people in the above-mentioned social classes.
2022/05 Reconsidering social classes and functional income distribution in the 21st century. A theoretical and empirical assessment
Authors: FANA Marta, VILLANI Davide
Abstract: The original assumption behind the measurement of functional income distribution was that this measure would reflect uniquely the income allocated to different social classes. However, this straightforward dichotomy is more complicated today than it was 200 years ago for different reasons, such as the diversification of sources of income, and the role of managers. This paper proposes a new estimation of factors income distribution that is based not only on the source of income but also considers class belonging. We provide an empirical estimate for Italy (1991-2016) using the Survey on Households Income and Wealth (Bank of Italy). The revised labourers share is lower than the standard wage share. Moreover, we show that the size of the labour class is growing considerably due to the expansion of wage earners while at the same time they suffer a remarkable loss of income. Despite some labourers move towards the top of the distribution, most of the growing presence of wage income in the top of the distribution is imputable to managers.
2022/04 The early roots of the digital divide: socioeconomic inequality in children’s ICT literacy from primary to secondary schooling
Authors: PASSARETTA Giampiero, GIL HERNANDEZ Carlos
Abstract: Information and communications technology (ICT) skills are crucial for labour market success and full participation in society. Socioeconomic status (SES) inequality in the development of ICT skills would prevent disadvantaged children from reaping the benefits of the digital age. Besides, the digital divide in ICT literacy might add to the already well-documented large and persistent SES inequality in ‘hard’ skills—like math, reading, and science. This article studies the roots, evolution, and drivers of SES inequality in ICT literacy from age 8 to 15 in Germany. Drawing from the German National Educational Panel Study (NEPS), we highlight five main findings: (1) SES gaps in ICT literacy exist as early as age 8 (grade 3) and are similar in size compared to SES gaps in hard skills; (2) like hard skills, SES gaps in ICT literacy remain stable over primary and tracked lower secondary schooling; (3) ICT access and use at home and school do not substantially explain SES gaps in ICT literacy at any age; (4) selection into school tracks seems a critical pathway, although not necessarily a causal one, leading to SES inequality in secondary school; (5) SES gaps in ICT literacy are not observed among children with similar levels of hard skills. We discuss the implications of these findings for the interdisciplinary literature on social stratification, skill formation, and the digital divide.
Authors: GIL HERNANDEZ Carlos, VIDAL LORDA Guillem, TORREJON PEREZ Sergio
Abstract: EGP (Erikson-Goldthorpe-Portocarero)-based occupational class schemas, rooted in industrial-age employment relations, are the standard measure of socioeconomic position in social stratification. Previous research highlighted EGP-based schemas’ difficulties to keep up with changing labour markets, but few tested alternative explanations. This article explores how job tasks linked to technological change and economic inequality might confound the links between employment relations, classes, and life chances. Using the European Working Conditions Survey covering the EU-27, this article analyses over time and gender (1) the task distribution between social classes; and (2) whether tasks are predictive of class membership and life chances. Decomposition analyses suggest that tasks explain class membership and wage inequality better than employment relations. However, intellectual/routine tasks and digital tools driving income inequality are well-stratified by occupational classes. Therefore, this article does not argue for a class (schema) revolution but for fine-tuning the old instrument to portray market inequalities in the digital age.
Authors: MUÑOZ DE BUSTILLO LLORENTE Rafael, ESTEVE MORA Fernando
Abstract: The purpose of this working paper, the first of a series of three aiming at studying social classes from an economic perspective, is to review the role played by social classes in economic analysis. With that aim, we will first discuss the use of the concept of social classes in the analysis of classical economists. Then we will present the reasons behind the abandonment of the concept of social classes as an analytical tool by the marginalist school who triumphed in the final quarter of the 19th century, changing the economic paradigm, and by mainstream economists in the 20th Century. Nevertheless, it can be argued that the classical idea of social class (based on the source of income: wages versus profits) has somehow remained alive in modern macroeconomic analysis, if in disguise, behind the concept of functional (or factorial) distribution of income. The last part of the paper reviews the role played by the functional distribution of income in current macroeconomic analysis, and studies how the evolution of the economy and labour relations in the last few decades has made the interpretation of the functional distribution of income in terms of social classes less relevant than in the past.
2022/01 Contemporary class analysis
Author: OESCH Daniel
Abstract: A popular thesis in social stratification argues that the middle class is declining. Our chapter argues that this thesis is flawed both conceptually and empirically. Conceptually, it mixes up the middle and working class and, empirically, misrepresents the trends that shape the class structure. Our chapter discusses the main concepts of class and proposes a model that grasps the class structure of contemporary Western societies. Based on clearer concepts, labour force surveys clearly show that the early 21st century did not see the demise, but the expansion of the (salaried) middle class. Never in history had so many people been working in managerial, professional and technical jobs. By contrast, over the last four decades, the working class experienced a massive employment decline – and this decline had far-reaching consequences. It has vastly reduced its political clout as shown in decreasing trade union density and strike activity as well as in rising income inequality. Moreover, it has led to a fundamental realignment of class voting and contributed to growing family instability. Rather than eroding the middle class, the last decades have put an end to the working-class century.
Here we will publish policy briefs covering pressing issues for the European Commission that are related to the research lines of the DIGCLASS Project.
2022/01 Whom does inflation hurt most?
Authors: VILLANI Davide; VIDAL LORDA Guillem
Abstract: Western economies are experiencing a rapid increase in inflation rates fuelled by energy prices and the war in Ukraine. Yet, the impact of the price increase is not equally distributed. In 8 out of 17 countries, lower-income groups whose consumption basket is mainly composed of essential goods are most affected by the increase in prices. Poorest households suffered a rise in prices 2 to 5 percentage points higher than the wealthiest households. Target compensatory policies financed through higher revenues from energy taxes could be an effective way to mitigate the regressive effect of inflation.
Here we will publish reports summarising the workshops, seminars and other activities organised by the DIGCLASS Project.
Authors: SALAZAR VALEZ Leyre; GIL HERNANDEZ Carlos; VIDAL LORDA Guillem; FERNANDEZ MACIAS Enrique; SOSTERO Matteo; THIEMANN Andreas
Abstract: This document summarises the highlights of the Seminar Series of the Social Classes in the Digital Age (DIGCLASS) Project held between October 2021 and June 2022. The DIGCLASS seminar series is expected to facilitate the exchange of cutting-edge ideas and debates between social science academics from research institutions worldwide, policy-makers and a general audience. The topics of the seminars are interdisciplinary including social inequality and stratification, labour economics, political economy, and political behaviour.
Authors: NOGUERA Jose Antonio; SALAZAR Leire; VIDAL LORDA Guillem
Abstract: Real Utopias for a Social Europe consists of technical debate-type workshops on various bold and innovative social policy proposals. Leading policy experts will come together to assess and discuss these policy proposals’ feasibility, distributional impact, costs, and scalability through evidence based on pilots and field experiments, microsimulation studies, actual policy experiences and other empirical research designs. The objective is to bolster a hive mind that can provide rigorous and creative tools to tackle growing socio-economic inequalities in the context of major social and economic transformations ahead.The first workshop in the series addressed two types of universal benefits, namely universal inheritance (UI) and universal basic income (UBI). This high-level event, with more than 40 participants, brought together 30 high-profile international experts on different aspects of such policies. This workshop closely fits the European Commission’s priority of dealing with an economy that works for people.
2022/01 Kick-off Workshop Report
Authors: SALAZAR VALEZ Leyre; GIL HERNANDEZ Carlos; VIDAL LORDA Guillem; VILLANI Davide
Abstract: This document is the report of the Kick-off Workshop of the Social Classes in the Digital Age (DIGCLASS) project held on the 21-22 of September 2021. The kick-off workshop was a high-level event with more than 100 participants that brought together 13 high-profile international experts on social inequality from different social science disciplines to discuss technological change and inequality, two topics directly under the European Commission’s priorities. The objective was to generate synergies with leading experts and institutions globally on these two key areas to feed
the policy process relevant for the Commission. The programme was structured around four overarching questions: 1. Are existing systems of social protection adequate for the digital age?
2. Are contemporary societies still class-based? 3. How are digital technologies transforming the
social structure? 4. Does socioeconomic position still drive political outcomes? Each of the questions were addressed by three to four experts in a round table format, offering a stimulating debate on the implications of technological change for social inequalities and aiming to promote collaboration
between the CAS and leading experts and institutions globally, in order to help shape and inform policy making of the Commission.