A cross-country analysis of the relationship between income inequality and social capital
AbstractThis study investigated whether earnings inequality is associated with social capital as measured by active membership in organizations and interpersonal trust. Pearson product-moment correlation analysis showed that greater earnings inequality was associated with lower values on both measures of social capital in 14 European countries. While causality in either direction cannot be inferred from this result, it does suggest the possibility that earnings inequality negatively affects social capital. To test this idea further, we also tentatively examined whether other societal indicators related to earnings inequality are associated with social capital. These alternative indicatorsthe countrys percentage of urban residents, percentage of residents with tertiary education, and government spending as a percentage of GDPdid not show stronger relationships with social capital than did earnings inequality. Further analysis of the data by excluding specific groups of countries indicated little association between earnings inequality and measures of social capital. These results suggested that country-specific economic or cultural values play a large role in how earnings inequality and social capital are related.
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Bibliographic InfoPaper provided by Maastricht : ROA, Research Centre for Education and the Labour Market in its series Technical Reports with number 003.
Date of creation: 2013
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Web page: http://www.maastrichtuniversity.nl/web/UMPublications.htm
Wage Level and Structure; Wage Differentials; Economic Sociology; Economic Anthropology; Social and Economic Stratification;
Other versions of this item:
- Heijke J.A.M. & Ioakimidis M., 2013. "A cross-country analysis of the relationship between income inequality and social capital," ROA Technical Report 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
- NEP-CWA-2013-10-18 (Central & Western Asia)
- NEP-EUR-2013-10-18 (Microeconomic European Issues)
- NEP-SOC-2013-10-18 (Social Norms & Social Capital)
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