This paper explores the idea that how wealth is distributed across social groups (ethnic or language groups, gender, etc.) fundamentally affects the evolution of economic inequality. By providing microfoundations suitable for this exploration, this paper hopes to enhance our understanding of when social forces contribute to the reproduction of economic inequality, and what the relevant policy implications might be. In tackling this issue, this paper offers contributions in two domains. First, it adds a dimension to the literature on social capital. Second, it offers a modest generalization of the concepts of identity, alienation and economic polarization used by Esteban and Ray (1994). This generalization permits us to consider the multiple characteristics that shape social identity, inclusion and exclusion. It also underwrites a higher-order measure of socio-economic polarization that permits us to explore the hypothesis of Frances Stewart and others that economic inequality is most pernicious and persistent when it is socially embedded. Among other things we are able to show that holding constant the initial levels of economic polarization and inequality, increases in socio-economic polarization deepen the reproduction of economic inequality.
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2004 Annual meeting, August 1-4, Denver, CO with number
20132.
Length: Date of creation: 2004 Date of revision: Handle: RePEc:ags:aaea04:20132
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Steven N. Durlauf & Marcel Fafchamps, 2004.
"Social Capital,"
NBER Working Papers
10485, National Bureau of Economic Research, Inc.
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