Socioeconomic status

Socioeconomic status (SES) or socioeconomic situation is a measurement used by economists and sociologists. The measurement combines a person's or their family's economic or wealth level and social position (generally determined by education level) in relation to others.

In common parlance "socioeconomic status" is synonymous with social class. However, academics distinguish social class from socioeconomic status, using the former to refer to one's relatively stable cultural background and the latter to refer to one's current social and economic situation which is consequently more changeable over time.

When analyzing a family's SES, the household income and the education and occupations of its members are examined, whereas for an individual's SES only their own attributes are assessed. Recently, research has revealed a lesser-recognized attribute of SES as perceived financial stress, as it defines the "balance between income and necessary expenses". Perceived financial stress can be tested by deciphering whether a person at the end of each month has more than enough, just enough, or not enough money or resources. However, SES is more commonly used to depict an economic difference in society as a whole.

Socioeconomic status is typically broken into three levels (high, middle, and low) to describe the three places a family or an individual may fall into. When placing a family or individual into one of these categories, any or all of the three variables (income, education, and occupation) can be assessed.

Education in higher socioeconomic families is typically stressed as much more important, both within the household as well as the local community. In poorer areas, where food, shelter and safety are a priority, education is typically regarded as less important. Youth in poorer households are particularly at risk for many health and social problems in the United States, such as unwanted pregnancies, addiction, drug abuse, diabetes and obesity.

Additionally, low income and education have been shown to be strong predictors of a range of physical and mental health problems, including, meningitis, respiratory viruses, arthritis, coronary disease, and psychosis, schizophrenia. These problems may result from environmental conditions at home or in the workplaces, or using the social causation model where disability or mental illness, may be the precursor leading to a person's social status including freedoms and liberties.

Income refers to wages, salaries, profits, rents, and any flow of earnings received. Income can also come in the form of unemployment or worker's compensation, social security, pensions, interests or dividends, royalties, trusts, alimony, or other governmental, public, or family financial assistance. It can also come from monetary winnings, like lotteries and other games or contests where money is awarded as a prize.

Income can be looked at in two terms: relative and absolute. John Maynard Keynes's absolute income hypothesis predicts that as income increases, so will consumption, but not at the same rate. Relative income dictates a person's or family's savings and consumption based on the family's income in relation to others. Income is a commonly used measure of SES because it is relatively easy to figure for most individuals.