Occupational Percentile Rank: A New Method for Constructing a Socioeconomic Index of Occupational Status

Abstract

In this paper, we propose a method for constructing an occupation-based socioeconomic index that can easily incorporate changes in occupational structure. The resulting index is the occupational percentile rank for a given cohort, based on contemporaneous information pertaining to educational composition and the number of workers at the occupation level. An occupation may experience an increase or decrease in its occupational rank due to changes in relative sizes and educational compositions across occupations. The method is flexible in dealing with changes in occupational and educational measurements over time. Applying the method to U.S. history from the mid-nineteenth century to the present day, we derive the index using IPUMS U.S. Census microdata from 1850 to 2000 and the American Community Surveys (ACSs) from 2001 to 2018. Compared to previous occupational measures, this new measure takes into account occupational status evolvement caused by long-term secular changes in occupational size and educational composition. The resulting percentile rank measure can be easily merged with social surveys and administrative data that include occupational measures based on the U.S. Census occupation codes and crosswalks.