Persistent inequality and social relations: An intergenerational model

ABSTRACT

This paper studies the influence of individual social capital on the persistence of socioeconomic inequality. The set of social relations constitute a form of capital that provides the individual with a wide range of resources. Social capital interacts with other forms of capital, particularly with human capital, to enhance inequality. The overlapping-generations model proposed here focuses on the long-term investment processes in human and social capital. When these effects are considered, a society may end up divided into two groups. The first comprises people stuck in a trap of low intergenerational mobility resources. The second group includes people with increasing levels of education and social capital. Within the last group, income inequalities persist due to initial differences in social capital.

KEYWORDS:

• Individual social capital
• inequality
• stratification

Acknowledgments

We would like to thank two anonymous reviewers for their helpful comments and suggestions.

Notes

¹ Despite this double micro- and macro-perspective in social capital, most of the literature focuses on the study of macro-effects, implicitly accepting that frequent social interactions facilitate the elimination of opportunistic behavior problems and promote general trust (Knack & Keefer, 1997; Lambsdorff, 2007; Putnam, 1993). The study of the micro-effects is much less developed.

² In this sense, two systems of measurement have been proposed: the name generator and the position and resources generator. In both cases, you ask the focal subject about his/her social contacts in different areas. In the first, the names of those who facilitate the access or mobilization of a particular resource are collected, while in the second only the accessibility or effective mobilization of this resource is considered (Lambsdorff, 2007; Van Der Gaag et al., 2007).

³ From an expressive point of view, there is a clear relation between strong ties (relational goods) and subjective well-being (Pena-López & Sánchez-Santos, 2017).

⁴ The term “homophily” expresses the individual preference for establishing networks of relation with those who present status similarities; etymologically means “preference for the similar or the equal” (McPherson et al., 2001).

⁵ In the same way, previous research has found differences in individual social capital linked to variables such as sex or ethnic group (e.g., see Lin, 2000; review; Omi & Winant, 1994; West & Fenstermaker, 1995) and its effects on the inequality of access to education, income, and status (Moren-Cross & Lin, 2008).

⁶ In anthropological terms, those societies that enhance social distance give greater efficiency to this mode of interaction.

⁷ On the contrary, the expressions of general social capital, a large set of works has found highly significant relationships (Putnam, 2000; McPherson et al., 2001; Wolfinger & Rosenstone, 1980).

⁸ Children of well-educated but unconnected parents may initially attain higher social connectedness due to the inertia of improved educational levels, but the constraints that poor social networks pose to earned income and returns to investments will eventually cause a decline in both human and social capital.

Additional information

Funding

Financial support by the Ministerio de Economía, Industria y Competitividad, Spain (Project CSO2017-86178-R) is gratefully acknowledged.