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.

Augustana College (IL)

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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?

Social Capital and Stratification of Young People

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

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.

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