REGRESSION ANALYSIS: Accounting for Differences in SEI among Workers
AN IMPORTANT characteristic of any research into socioeconomic inequality is whether the individual or the group is the basic unit of analysis. That is, underlying any study of socioeconomic inequality is an implicit decision to conceptualize and measure the causes and extent of inequality either in terms of individuals or in terms of groups. As argued in chapter 2, there are strong advantages to focusing on groups for developing a realistic understanding of socioeconomic inequality that will be helpful in predicting and in devising distributional policies. Furthermore, rather than define groups simply on a demographic basis, it is useful to define socioeconomic groups that reflect the institutional segmentation of the labor market into separate occupations. The mobility table analysis in chapter 3 and the cluster analysis in chapter 4, motivated by this interest in socioeconomic groups, use data on intergenerational mobility to characterize occupations.
The individual is the basic unit of analysis in orthodox economic theory and American ideology. This individualistic perspective is applied by those researchers who have argued that modern methods of empirical analysis require us to conclude that socioeconomic origins are not very important in America. Rather than ignore this approach or merely to point out its limitations, there is value in translating our ideas into the individualistic framework in order to clarify our research for persons preferring to think in individualistic terms.
There are other reasons for individualistic analysis of mobility data. The data are collected as observations on individuals; even if focus is to be on