Monday, January 19, 2015

A taxi driver’s tale, Part 1: Social status in the Georgian labor market

Taxi drivers tell perhaps the most telling story of Georgia’s economic transition. They often complain that the transition made their high social status useless, thus pushing them into taxi driving. This often heard and mocked complaint highlights the contrast between what is expected from and what is delivered by the labor market. Taxi drivers expect their social status to remain at work in economic life, while the mockers believe that social status has no relevance for Georgia’s current labor market. Based on CRRC’s Caucasus Barometer (CB) survey data, this blog post shows that the taxi drivers are not entirely wrong. According to 2013 Caucasus Barometer survey, higher social status is associated with a higher likelihood of employment, a better job, and greater mobility on the labor market.

The taxi drivers often “operationalize” their social status as having a diploma or two from one or more higher educational institutions. In Georgia, another common cue to signal high social status is family background, normally operationalized in the same way. Not only are these two cues at the core of the taxi driver’s tale, but notably, the same characteristics often prevail when traditionally selecting a favorable bride or groom. Hence, the two cues fit the Weberian understanding of social status as perceived prestige and esteem that is related to economic relations, but cannot be reduced to it.

Following the taxi drivers’ perspective, this post proposes a simple index of social status, which includes two components: (1) respondent’s level of education, and (2) level of education of the respondent’s parents. In both cases, education variables are recoded so as to have three categories: (1) secondary or lower education, (2) secondary technical education, and (3) incomplete or complete tertiary education.

The index is a simple sum of these indicators and hence, it ranges from 0 to 4. At the highest extreme of the index stands a person with tertiary education having at least one parent with tertiary education (score 4). A person without any of these characteristics stands at the lower extreme of the continuum (score 0). Individuals with scores between the extremes are counted as having middle social status. As shown below, more than half the population belongs to the middle status group, whereas 28% and 19% fall into the low and the high social status groups respectively.  

Looking at the distribution of social status groups across settlement type, age and gender, it is notable that 39% of Tbilisi residents are in the high status group compared to only 7% of residents of rural areas. Low (42%) and middle (51%) status groups are predominant in rural areas. Urban settlements outside the capital have the highest percentage of the middle status group (62%). Interestingly, no important differences can be observed by gender. Younger cohorts tend to have higher education as well as more educated parents compared to older cohorts, and are thus more likely to belong to a higher status group.  

But, does social status have implications for an individual’s standing on the labor market? The Caucasus Barometer uses several questions to measure respondents’ employment status. While those who are employed or self-employed are identified using one survey question (“Which of the following best describes your situation?” with answer options including “Working either part-time or full-time” and “Self-employed”), identifying the unemployed is a trickier affair. To do so, it is necessary to separate those who do not work by choice and those with physical constraints to labor force participation from those who do not work resulting from a failure to find a job, i.e. the unemployed. To identify the latter group, a combination of two questions has been used - is the respondent interested in a job and if so, is he or she ready to start working within two weeks if a suitable job were available. Respondents who do not meet these two conditions are not formally unemployed and are not counted as part of the active labor force.  

From cross-tabulating an individual’s social status and his/her employment status, it is evident that the plurality of the low status group is out of the labor force (34%) or unemployed (29%). In contrast, the plurality of the high status group is employed (43%). However, it is noteworthy that one in three of the high social status group is unemployed (35%), while almost half of the individuals with low social status, on the other hand, were never employed.

Thus, the higher the individual’s social status, the higher his/her employment chances. Moreover, the status group a person belongs to indicates his/her occupational status. More than half of the high social status group works in high status positions, i.e. managers and professionals. A plurality of the low social status group (41%) works as unskilled laborers (elementary occupations, sales people, and baby sitters). Nonetheless, the majority of the low and middle status group enjoy mid-level occupations, such as technician, clerk, or skilled agriculture worker.

Note: The variable used to measure occupational status is JOBDESC. Respondents were asked, “Which of the following best describes the job you do?” Suggested answer options included: Manager; Professional; Technician / Associate professional; Clerical support worker; Service / Sales worker; Skilled agricultural / Forestry / Fishery worker; Craft and related trades worker; Plant and machine operator / Assembler; Elementary occupation; and Armed forces occupation. For this blog post, the options “Manager” and “Professional” were combined into the category ‘high’. “Armed forces occupations”, “Plant and machine operators”, “Craft and related trade workers”, “Skilled agricultural workers”, “Clerical support workers”, and “Technicians” were combined into the category ‘middle’, and “Elementary occupations” and “Service/sales workers” were grouped into the category ‘low’.  

Social status is also associated with employment sector and type of work for those who work. People who belong to the high status group rarely own businesses (18%) and are generally either state employees (41%) or employees of private companies (40%). At first glance it may seem paradoxical that those in the lower status group are more likely to own a business (55%), however, taking a closer look at Georgian reality makes it clear that these business owners are mostly self-employed agricultural workers or petty traders. Those in the middle status group are more or less equally distributed between the public, private and self-owned business sectors. As noted, people belonging to the low and middle status groups are more likely to work in agriculture (40% and 19% respectively). Individuals in the high status group are employed by educational institutions (24%) more often than in any other sector.

Importantly, the data shows that the Rose Revolution marked an important threshold for the Georgian labor market. The majority of employed individuals of all status groups started working at their primary workplace after 2004. This year perhaps also marked an important shift in the structure of the economy as 46% of the high and 33% of the middle status groups lost their job after 2004.
Not only are high status individuals more mobile, but so too are their household members who were more than twice as likely to find a new job in the last 12 months compared to the household members of individuals belonging to the low status group (16% vs. 7%). However, exactly the same was true about losing a job in the last 12 months – household members of those in the high status group lost jobs twice as often as those in the low status group.

This blog post has shown that the taxi driver’s tale of frustration has an observable underpinning – social status, operationalized as an individual’s and his/her parents’ education, is associated with an individual’s standing on the labor market. People belonging to the high status group are more likely to be employed, generally have better jobs, and exhibit greater mobility on the labor market. Hence, the preliminary conclusion drawn from this blog post is optimistic for the taxi driver, who perceives his current job as inferior to his status. If he belongs to a high social status group, he is more likely to find a better job. The second blog post in this series will describe how social status is related to household income and spending, as well as an individual’s perceived economic rung.

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