New Zealand Socioeconomic Index

The framework used for NZSEI is the ‘returns to human capital’ model, which was first developed for the International Socioeconomic Index (ISEI). This model posits that there is a relationship between cultural capital and material rewards, and that this relationship is mediated by occupation. More simply, the ‘returns to human capital’ model views occupation as the means by which one’s education is converted into income. Thus, differences in occupation are likely to represent differences in life chances and opportunity, and on this basis, occupation can be used to stratify individuals according to socioeconomic status.

The forerunner of NZSEI was the widely-used Elley-Irving scale, which assigned occupations to one of six socioeconomic status groups based on equal weighting of education level and income associated with each occupation. NZSEI represents an attempt to derive an occupation-based measure of socioeconomic status for New Zealand that can be used as both a continuous and a group measure, and is grounded in a conceptual model that differs slightly from the Elley-Irving framework.

The NZSEI was first developed using 1991 Census data (Davis, et al. 1997) and has subsequently been updated using data from the 1996 Census (Davis, et al. 2004; Galbraith, et al. 2003), 2006 Census (Milne, 2012; Milne, et al, 2013), 2013 Census (Fahy, et al. 2017), and most recently, the 2018 Census (Boven, et al. 2022). Recent versions of the NZSEI (NZSEI-06, NZSEI-13 and NZSEI-18) classify occupations according to the Australian and New Zealand Standard Classification of Occupation (ANZSCO), whereas older versions used the New Zealand Standard Classification of Occupations (NZSCO). NZSEI-06 and NZSEI-13 were developed through summer studentships within COMPASS.

As a measure of individual socioeconomic status, the NZSEI scales only require occupational data for its classification, and so can be readily applied to administrative datasets and social surveys. The NZSEI can be used both as a continuous scale (from 10, low SES, to 90, high SES) and as a categorical grouping of occupations. Scales constructed from the 1996 Census onwards also include a method of imputing occupational scores for those not in the labour force using age and education data.

All versions of the NZSEI have been shown to validate against several health and social outcomes. NZSEI-06 and NZSEI-13 showed expected socioeconomic gradients with area deprivation, smoking prevalence and housing tenure. NZSEI-06 was also tested against access to a motor vehicle and showed a slight relationship with car access. In addition to the outcomes examined for NZSEI-13, NZSEI-18 was validated against hospitalisations, self-rated health and life-satisfaction and showed expected socioeconomic gradients of varying strength.

All versions of the NZSEI have also been tested for various ethnic and gender groups. More recent versions of the scale have also been examined by rurality (urban vs rural), region (Auckland vs the rest of New Zealand), country of birth (born in New Zealand vs born overseas), and most recently, disability status (disabled vs non-disabled). These checks generally showed some differences in average age, education and income within occupations, and some differences in the NZSEI scores assigned, across groups. Despite this, there were high correlations between the final scales and subgroup-specific scales, indicating similar socioeconomic structuring of occupations across groups. This means that the scales should capture socioeconomic status adequately for the groups examined. Further details specific to the individual scales are available in the reports and documents below.

Thus, the NZSEI is likely to be a useful addition to the toolbox of researchers wishing to assess and understand the impact of socioeconomic status on a range of outcomes.