Economic Inequality and the Social Capital Gap in the United States across Time and Space
| Author | Matthew Wright |
| Published date | 01 August 2015 |
| Date | 01 August 2015 |
| DOI | http://doi.org/10.1111/1467-9248.12113 |
| Subject Matter | Article |
Economic Inequality and the Social Capital Gap
in the United States across Time and Space
Matthew Wright
American University, Washington DC
Although researchers have demonstrated that economic inequality and social capital are inversely related in an
aggregate sense across time and space, to date little is known about the relationship between inequality and the
socio-economic disparity in social capital outcomes. Using yearly cross-sectional surveys of American twelfth graders
fielded during 1976–2009, I show that social capital is strongly related to parental socio-economic status, and that this
relationship grows in strength as economic inequality increases. This relationship is confirmed both over time and
cross-sectionally. Finally, I argue that, between resource-based and psychological accounts of why this relationship
exists, the former appears more promising.
Keywords: inequality; social capital; trust; civic engagement; public opinion
Few observers disagree that economic inequality in America has grown since the 1970s,
whether captured by wages, earnings or family income (McCall and Percheski, 2010).
Inequality in education, too, appears to have grown over this period (Fischer and Hout,
2006): driven by growth in assortative mating on education (Schwartz and Mare, 2005) as
well as other demographic changes, a wide gap opened during this period between the
more and less educated on a variety of outcomes related to family stability and economic
prosperity (Fischer and Hout, 2006; McLanahan, 2004).
The causes of this growth have received much scholarly attention (McCall and
Percheski, 2010; McLanahan, 2004; Neckerman and Torche, 2007); here, however, we
are interested in how they have altered social capital. While inequality and social capital
levels correlate robustly across time and space, few ask whether inequality is associated with
growing disparities in social capital along socio-economic lines. We test the hypothesis that
growing economic inequality should be associated with increasing gaps in various indica-
tors of youth social capital between the most and least well off in society. Youth are
emphasized in part because of an interest in the effects of economic inequality on life
expectation (rather than experience) at a sensitive stage of socialization, and also in part
because doing so allows for some conceptual progress towards untying highly reciprocal
relationships. Specifically, we use yearly surveys of high-school-aged youth collected
between 1976 and 2009 to demonstrate the relationship between parental socio-economic
status and the size of youth social capital gap conditional on contextual inequality. This
relationship holds across both time and space on a number of social capital indicators, and
appears to result from resource-based (rather than psychological) mechanisms.
Social Capital, Prosperity and Inequality
The term ‘social capital’ has been used in a variety of different ways. Here, we follow
Robert Putnam’s (2000) emphasis on trust, civic engagement, religious involvement and
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doi: 10.1111/1467-9248.12113
POLITICAL STUDIES: 2015 VOL 63, 642–662
© 2014 The Author. Political Studies © 2014 Political Studies Association
informal socializing. Some of these grow out of social networks, while others generate
them; all tend to be observed in communities with a higher level of social capital.
Social capital’s political relevance has been hotly debated. A host of scholarship asserts its
relationship to economic growth (Knack and Keefer, 1997), quality of democracy more
generally (Keele, 2007; Knack, 2002; Putnam, 1993) and support for redistribution
(Uslaner, 2002). Moreover, both formal and informal social networks have been linked to
elevated political participation (Huckfeldt and Sprague, 1995; Klofstad, 2007). In summary,
while it would be inappropriate to view social capital as a panacea for the ills of modern
democracies (Hibbing and Theiss-Morse, 2002; Portes and Vickstrom, 2011), it is relevant
to politics in interesting (albeit complex) ways.
Few doubt that social capital and economic prosperity go hand in hand. Social capital
accrues to what Jan Delhey and Kenneth Newton (2005) call society’s ‘winners’: the better
educated, the more well off financially and so on. ‘Winners’ tend to be ‘joiners’ for a
number of reasons, key among them being time, financial security, civic skills and greater
access to recruitment networks (Putnam, 2000; Verba et al., 1995). They tend to be
‘trusters’ because they stand to lose comparatively less if their trust is betrayed. While the
emphasis on the relative cost of betrayal is not universally endorsed (see, e.g., Uslaner,
2002), the basic relationship is unmistakable.
Distinct from the issue of prosperity per se, scholars have examined the relationship
between social capital and economic inequality. Similar arguments are made about trust
and civic/social engagement. For Eric Uslaner, the former rests on a foundation of
economic equality: ‘the rich and the poor have little reason to believe that they share
common values, and thus might well be wary of each other’s motives’ (Uslaner, 2002, p.
181). Alberto Alesina and Eliana La Ferrara (2000; 2002) posit a more generalized version
of the same argument: people favor racial and economic homophily in their social
networks, and perceive threat in more diverse settings. Higher contextual diversity thus
encourages individuals to ‘hunker down’ – that is, to trust less and withdraw from outward
engagement – in response. Extrapolated to the entire community, the expectation is an
aggregate decline on these dimensions. While most play up the racial angle, the argument
that economic inequality has similar effects on aggregate levels of social capital holds
empirically, whether the contextual unit is municipalities (Alesina and La Ferrara, 2000;
2002; Putnam, 2007), US states (Uslaner and Brown, 2005) or countries (e.g. Delhey and
Newton, 2005; Uslaner, 2002). Economic inequality has also been invoked to explain
declines in various dimensions of social capital in the US over time (Costa and Kahn, 2003;
Putnam, 2000; Uslaner, 2002).
The aforementioned studies focus on the aggregate level of social capital as inequality
increases. By contrast, the question of how the latter shapes disparities in social capital has
not received much empirical scrutiny. Pamela Paxton (1999) finds no evidence that the
overall dispersion of social capital has increased over time. However, she does not assess
differences in the amount of social capital expressed by different segments of the popu-
lation, and allows that declines in social capital may have been concentrated in more
marginalized segments. From a different angle, Theda Skocpol (2003) argues that
associational life in the US has become more tilted towards those from more privileged
backgrounds.
ECONOMIC INEQUALITY AND SOCIAL CAPITAL 643
© 2014 The Author. Political Studies © 2014 Political Studies Association
POLITICAL STUDIES: 2015, 63(3)
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