The Distribution of Social Capital across Individuals and its Relationship to Income

Kevin Corinth, Scott Winship and Thomas O'Rourke
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Thomas O'Rourke: American Enterprise Institute

AEI Economics Working Papers from American Enterprise Institute

Abstract: There have been several attempts to measure social capital-the value inhering in relationships-at an aggregate level, but researchers lack comprehensive individual-level social capital measures. Using a combination of direct linkage and imputation across several nationally representative datasets, we produce a comprehensive measure of social capital at the individual level. We validate our measure by aggregating it to the state level, finding strong correlations with existing state-level social capital measures. We document substantial social capital disparities between white Americans, on the one hand, and black and Hispanic Americans, on the other, as well as a strong educational gradient, which is comparatively weaker for Hispanics. We also provide new evidence on the relationship between income and social capital, using a comprehensive measure of income. We find that social capital increases with income but at a decreasing rate. The source of income matters, as an extra $10,000 in market income is associated with a 0.23 standard deviation increase in social capital for those with the lowest levels of market income, while an extra $10,000 in government transfer income is associated with a 0.08 standard deviation decrease.

Keywords: Family Structure; Income distribution; Social Capital (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Date: 2024-08
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