Measuring socioeconomic background: evidence and implications for measurement

Socioeconomic background continues to shape career opportunities in Australia, with people from disadvantaged backgrounds underrepresented in higher-income and leadership roles. While many organisations now collect demographic data to support diversity, equity, and inclusion (DEI), socioeconomic background remains largely ignored.
This report presents the validation of a set of survey questions designed to measure socioeconomic background in organisational contexts. Drawing on data from the nationally representative Household, Income and Labour Dynamics in Australia (HILDA) survey, four core items were tested: parental education, parental income support, neighbourhood-level disadvantage, and the type of school attended. Each item demonstrated meaningful associations with outcomes in later-life, such as educational attainment, employment status, and wages, confirming their value as practical indicators of socioeconomic background.
This analysis shows that parental education is the strongest predictor of outcomes, followed by school type and neighbourhood-level disadvantage. Parental receipt of income support also showed consistent, although smaller, effects. Together, these items provide organisations with robust tools to understand how socioeconomic background shapes workforce participation and progression. If organisations face limitations for implementing all four of these items, it is recommended that the parental education question be prioritised.
For reporting on these items, two approaches are proposed. The first, creation of a composite index of socioeconomic background that integrates responses across items. The second, more traditional benchmarking for each item against national norms. Both methods can help organisations identify representation gaps, and track progress in improving workforce diversity.
Ultimately, these measures will help organisations to measure and understand the socioeconomic background of their employees, which will provide concrete evidence to guide more inclusive hiring and promotional practices.