Neoclassical economics argues that workers are compensated in direct proportion to their productivity, however, this perspective does not consider the conditions that enable individuals to achieve the full compensation of their qualifications.  Accumulation of Human Capital (i.e., education) and the rise in income that follows higher levels of that capital is only fully maximized if the individual has access to enough social capital (i.e., proper contacts) which would enable them to maximize their accumulation of economic Capital.  Access to social capital enables access to more collective resources, which helps individuals get ahead in ways that their own individual efforts often cannot.

Theoretical Framework

- Sample Size: 438
- Swedish Students who had graduated from either a vocational school or university between 2005-2006
- 67% Response rate from university educated individual
- 56% Response rate from those graduating from vocational school
- Only graduates under the age of 40 included as part of sample
- Representative in gender with slightly more female participants
- Slight underrepresentation of racial minorities 


Data

- Gender (Female) is coded female = 1 and male = 0
- Socioeconomic background of respondents (labelled "SEB") is used as a composite measure of prestige, occupational position, and years of education of the respondent’s parents
- Immigrant Status: 1st or 2nd generation and region of origin

Social Capital Measures:
- Extensity: Size of network, includes number of ties/positions
- Upper Attainability: highest status jobs among known contacts/ties
- Heterogeneity: range of positions held by contacts/ties
- Composition of resources or average status of contacts/ties
- Membership in formal organizations


Measurements

In a study of young Swedish graduates, socioeconomic status (SES), parent education, and job status were positively correlated with levels of education, where higher status $$=$$ higher educational attainment. Education was positively correlated with income. Even when controlling for SES, men were more likely to possess high-status degrees and earn a higher income. SES was positively associated with social capital, meaning that having a degree is associated with more resources and ties within a network. Increases in membership to formal organizations were also associated with well-resourced networks. Finally, when social capital variables were included in the model, they reduced the coefficient for education, gender, and region of immigration, implying that social capital has a mediating effect on income.

Results: Social Capital and Stratification of Young People

The mediating effect of social capital on income indicates that individuals from disadvantaged groups (based on gender and race) often earn less due to a lack of social capital, which limits their access to high-status contacts and high-paying positions. While gender and racial background influence educational attainment, social capital retains a powerful correlational effect on income even when controlling for these demographic variables. This suggests that disadvantaged groups require initiatives to help them access resource-rich networks.

Social Capital Mediation of Income for Disadvantaged Groups

The modern economy is conventionally viewed as a meritocracy where individual abilities determine income, status, and place in the social hierarchy. However, research indicates that status and income achievement are heavily mediated by social processes, education, and ascribed resources. Social capital is a key social process that influences economic outcomes, as individuals who participate in formal organizations often have more opportunities available to them.

Social Capital as a Mediator of Economic Achievement

This article examines the effect social class, gender, and ethnicity on the social capital of young Swedish graduates, and how their subsequent accumulation of social capital impacts their status and salary as they enter the labor market. In other words, how do identity markers affect access to social capital, and how valuable is social capital in the labor market?

Augustana College (IL)

The sum of an agent’s social network, the resources within that network, and the ability to access and mobilize the resources and individuals from that network.  Social networks come in a variety of forms and compositions that include kin networks, families, business and social organization, and government institutions.  Bourdieu uses the term “durable network” to imply that the people and institutions that an agent has some form of long-lasting association with or membership in. All individuals within an agent’s network have some sort of resource that the agent needs or wants for any particular reason, and an agent has a varying ability to access other people or resources within that network in the form of an exchange or social obligation. 

Social Capital

Alireza Behtoui. “Social Capital and Stratification of Young People.” Social inclusion 1.1 (2013): 46–. Web.

Social Capital and Stratification of Young People

Coleman critiques and synthesizes two popular academic perspectives on human economic action: Rational Action Theory, and the Socialized Actor.  The Rational Actor perspective claims that agents have control over their resources and actions and can pursue their own self-interest but tends to ignore the external influence of the agent’s social environment.  The socialized view sees human action as a result historical and social norms and values that dictate individual economic decision making but lacks an adequate explanation for internal motivation.  Coleman uses dimensions of Social Capital to bridge the gap between these two perspectives, introducing an theory to human action that both accounts for the influence of social structures on the individual while allowing room for autonomous agency in pursuing economic action.  

Forms of Social Capital

Social structure made of actors and the set of all potential interactions with other actors or organizations.

- Strength of Ties

Social Networks 

Nan Lin is a proponent of neo-capital theories, which sees capital accumulation through the lens of an actor-based perspective rather than a class-based perspective.  As such, he posits that investment and mobilization of capital are mechanisms that can be used by individuals and communities in order to achieve beneficial outcomes.  He couples this view with an analysis of how inequality in the distribution of Social Capital affects socioeconomic inequality.  The proposition being that accumulation of Social Capital leads to better material outcomes (i.e., higher earnings, better employment, better mental health) and that inequality in Social Capital leads to inequality in these material outcomes.

Inequalities in Social Capital

- Psychological/sociological capitals and employee engagement

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