How do you measure income when income data are missing?
Income data are often unavailable in historical datasets, international comparisons and survey studies. Researchers have now developed a new measure that estimates the economic position of an occupation based on its typical earnings level.
Income is a key measure in research on inequality, social mobility and labour markets. Yet reliable income data are not always available or comparable across countries and time periods. Researchers at the Swedish Institute for Social Research (SOFI), together with colleagues in Switzerland and the United Kingdom, have developed a new measure that can be used when direct income data are missing.
The measure, called Occupational Earning Potential (OEP), is based on the median income within different occupations and places occupations within the overall income distribution. Its purpose is to capture the typical earning potential of an occupation rather than the actual income of individual workers.
Useful when income data are unavailable
Occupational information is often available even when income data are missing. This is the case, for example, in historical datasets and international surveys where income information may be incomplete or difficult to compare across countries.
The new measure makes it possible to use occupational information to estimate economic position. An occupation whose median income corresponds to the median income in society receives a value of 50, while an occupation among the top ten per cent of earners receives a value of 90.
Stable across time and countries
The researchers developed the measure using data from Sweden, the United Kingdom, Germany, Switzerland and the United States. The results show that occupations' relative positions in the income hierarchy are remarkably stable across both time and countries, making it possible to create a common international scale.
For example, cleaners and cashiers are found near the bottom of the scale, while physicians, IT managers and chief executives are among the occupations with the highest earning potential.
Can be used in research on social mobility
The researchers also show that OEP explains variation in income well and, in many cases, performs better than established occupation-based measures. Because the measure requires only information about individuals' occupations, it can be used in studies where income data are incomplete or entirely unavailable.
The measure can be applied in research on intergenerational social mobility, the role of education in shaping life chances, career trajectories and economic inequality. It may also be useful in historical studies and international comparisons where comparable income data are difficult to obtain.
About the study
The article is based on the research paper Occupational Earning Potential: A New Measure of Social Hierarchy in Europe and the US, published in European Sociological Review. The authors are Daniel Oesch, Oliver Lipps, Roujman Shahbazian, Erik Bihagen and Katy Morris.
Read the full article
In the journal Ekonomisk Debatt, Erik Bihagen, Katy Morris and Roujman Shahbazian describe the new measure and its applications in the article Att mäta inkomst utan inkomst – ett nytt mått på yrkens ekonomiska position ("Measuring income without income: a new measure of occupations' economic position")
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Last updated: 2026-10-28
Source: Swedish Institute for Social Research