(highlight:: Financial v.s. Human v.s. Social Capital
Key takeaways:
• Social capital is an important concept that refers to a person's social wealth and connections.
• Financial capital is related to wealth and possessions, while human capital is about skills and abilities.
• The meaning of social capital varies among different people.
• The study aims to identify which type of social capital is crucial for determining economic outcomes.
• Understanding the role of social connections in predicting future economic success is important.
Transcript:
Speaker 1
The reason we started the study is people talk about social capital all the time. And when we talk about financial capital, what do we mean? We usually mean wealth. We mean how much money do you have or what land and do I have? What investments do I have? When we talk about human capital, we're usually talking about your skills or your knowledge or your cognitive ability or how articulate you are, whether you're charismatic. So there's a whole series of things about your human side that is important. And social capital refers to your social wealth, how well connected am I? And this gets back to some things we talked about before. I am my central and influential in a network. And here, the part of the puzzle was that the word social capital has been thrown around now for a century or so. And it means lots of different things to different people. And we were trying to figure out which type of social capital really matters in determining your economic outcome. So if I want to figure out whether I'm going to be economically successful and secure in my later life, what is it about my network and my social connections that predict that later in
Speaker 2
Time?)
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(highlight:: The Impact of Social Capital on Mobility
Transcript:
Speaker 2
So you're using it to essentially map out the network in the same way as you did with the door knocking in the Indian villages that we spoke about in the last episode. So you're building a view of the network, which you can then say, well, from a social capital perspective, from a mobility perspective where the people start, where do they end up? Give us the numbers in the Facebook data. They're pre-staggering numbers.
Speaker 1
So we focus just on 25 to 44-year-olds, so that's just a small slice of the population. But that's a slice where we can see where they are and then where they were in high school. We can go back and see who their high school friends were. That already turns out to be more than 70 million people. So our data set consisted of more than 70 million people and more than 20 billion friendships. So it's a huge data set. And actually the team on the paper, I think we have 22 authors. So it's a big set of people to analyze this because it's not as if it's just a spreadsheet. You look at a spreadsheet or you just draw the network. With this size, it takes a lot of programming skills and other things just to be able to even wrestle all that information into a form where we can use it and analyze it in a meaningful way.
Speaker 2
We're going to get into what you found and what social capital actually drives mobility. But before we do, I think it's useful to define something that comes up again and again. The concept of socioeconomic status, what's that?
Speaker 1
Two economic status and what we really did was try to predict people's standing economically. So it's more their economic standing and really a prediction of their income.)
- Time 0:06:59
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(highlight:: The Concept of Social Cohesion and Its Relationship to Economic Mobility
Transcript:
Speaker 2
The concept of social cohesion. What's social cohesion?
Speaker 1
Yeah, so social cohesion refers to, let me give you a couple of examples. So one is just, are all the people around me in touch with each other? Does everybody in the community know each other? Is it a really cohesive community? So if I go out on my block, are all my neighbors friends with each other? So all my neighbors know each other. And that gets back to our discussions of Kazimore Midishi in the previous episode. Having friends in common is really important. If I'm trying to make sure that you behave and we don't have a legal system to do that, I might rely on the fact that we both know the same people and we both have those friends in common. And if you misbehave, then those friends can help sanction you. And so social ostracism depends a lot on having really close knit networks that gossip a lot. And that can be very powerful in enforcing behavior. And so social cohesiveness, what we do is we look at the local network patterns. If I'm friends with somebody, do we have friends in common? Or most of my friends friends with each other. These are network measures that you can see in the data and very pretty dramatically across different areas. So you get a pretty widespread difference depending on whether you're looking at a small rural town in the west or an urban city in the east. You'll see very different patterns of these kinds of cohesiveness.
Speaker 2
And the key question is, does it make a difference to mobility?
Speaker 1
This is sort of the, it takes a village kind of, you know, story. Usually we think, oh yeah, you know, the community that you're in and the strength of that community is going to be very important in predicting mobility. It turns out not to have much prediction. Perhaps surprisingly, whether or not I have strong cohesion or not has a very low correlation with whether or not I end up moving ahead in the economic ladder.)
- Time 0:10:11
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(highlight:: What is Social Cohesion in Communities?
Key takeaways:
• The concept of social cohesion is about the level of connection and familiarity among people in a community.
• Social cohesion can be indicated by factors such as the extent to which neighbors know each other and have mutual friends.
• Having close-knit networks with strong gossiping can be powerful in maintaining social order.
• Different areas exhibit varying degrees of social cohesiveness, with notable differences between small rural towns and urban cities.
Transcript:
Speaker 2
Concept of social cohesion. What's social cohesion?
Speaker 1
Yeah, so social cohesion refers to, let me give you a couple of examples. So one is just, are all the people around me in touch with each other? Does everybody in the community know each other? Is it a really cohesive community? So if I go out on my block, are all my neighbors friends with each other? So all my neighbors know each other. And that gets back to our discussions of Kazimore Midishi in the previous episode. Having friends in common is really important. If I'm trying to make sure that you behave and we don't have a legal system to do that, I might rely on the fact that we both know the same people and we both have those friends in common. And if you misbehave, then those friends can help sanction you. And so social ostracism depends a lot on having really close knit networks that gossip a lot. And that can be very powerful in enforcing behavior. And so social cohesiveness, what we do is we look at the local network patterns. If I'm friends with somebody, do we have friends in common? Or most of my friends friends with each other. These are network measures that you can see in the data and very pretty dramatically across different areas. So you get a pretty widespread difference depending on whether you're looking at a small rural town in the west or an urban city in the east. You'll see very different patterns of these kinds of cohesiveness.)
- Time 0:10:11
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(highlight:: Why Social Cohesion in a Community Isn't Correlated with Economic Mobility
Key takeaways:
• The strength of a community does not have much predictive power in determining economic mobility.
• Social capital is important for individuals who are not advancing, but it does not help them get out of their current situation.
• Strong social capital may arise from a situation where individuals are not advancing and are staying in the same community.
• Social capital does not assist in building connections needed for obtaining jobs, education, and upward mobility.
Transcript:
Speaker 2
And the key question is, does it make a difference to mobility?
Speaker 1
This is sort of the, it takes a village kind of, you know, story. Usually we think, oh yeah, you know, the community that you're in and the strength of that community is going to be very important in predicting mobility. It turns out not to have much prediction. Perhaps surprisingly, whether or not I have strong cohesion or not has a very low correlation with whether or not I end up moving ahead in the economic ladder.
Speaker 2
And why is that?
Speaker 1
It's not to say that this kind of social capital isn't really important. So what explanation is that this kind of social capital is something you rely on because you're not advancing. So you know, part of the reason I have to rely on my neighbors for help and maybe alone or taking care of something is because I actually don't have any other means of obtaining these things. And so it could be that what ends up happening is this kind of strong social capital ends up coming about as a result of the fact that we are in a situation where we're not advancing and we're Staying in the same community and that ends up building this, but it's not helping us get out. It's not helping build connections that I need to get jobs and to educate myself and to move up the ladder.)
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(highlight:: What is Civic Engagement in Communities?
Transcript:
Speaker 2
So the second broad area you looked at civic engagement, what's that?
Speaker 1
Public engagement is another one that people have looked at and thinking of as an important element of community strength. And this is, are people volunteering? Do people trust each other? So there's a whole series of surveys where you ask, do you trust your neighbor not to steal from you? Do you trust politicians in your area? So there's a whole series of questions about trust, about engagement. Are you volunteering? Are you donating? Am I part of civic organizations? Are there powerful groups that are taking part because of volunteer among the community? So these are kinds of things that we think of as this is a well-functioning community, right? People are engaged, they're cooperating with each other, they're helping each other out via these kinds of volunteer organizations. You think of that as civic engagement.)
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(highlight:: Civic Engagement in Communities Isn't Correlated with Economic Mobility
Key takeaways:
• Not much of a strong relationship with economic mobility.
• Not providing people with the types of things they need to climb up the ladder.
• Could indicate a more functional and pleasant community to live in.
• Not helpful for personal advancement.
Transcript:
Speaker 2
And what did you find with it?
Speaker 1
Not that much of a strong relationship with economic mobility. So it's not providing people with the types of things they need to climb up the ladder. But again, it could mean that I'm in a much more functional community and it's a much more pleasant place to live. And maybe there's a whole series of benefits from this, but it's not something that's helping me advance.)
- Time 0:13:41
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(highlight:: What is Economic Connectedness in Communities?
Key takeaways:
• Economic connectedness is a measure of how well connected the poor are to the rich in terms of friendships.
• A fraction of the poor's friends being in the top half of the income distribution indicates higher economic connectedness.
• Economic connectedness ranges from zero to one, with zero indicating no wealthy friends and one indicating 50% of friends being above median income.
• A higher economic connectedness suggests fewer constraints on human interaction and friendships.
Transcript:
Speaker 2
What is economic connectedness?
Speaker 1
Yeah, so economic connectedness, what we looked at was how well connected in terms of friendships are the poor to the rich. So look in a given area and look at people who are in the bottom half of the income distribution and ask, what's the fraction of their friends that are in the top half of the income distribution? And how does that compare? So if they were making friends at a normal rate, half their friends should be above average income, right? So they should be above median income. So half of their friends should be rich in some sense. And if they aren't well connected, then they're going to have fewer than half of their friends. And so we have this measure of economic connectedness where if the fraction of my friends is actually a half and it's supposed to be a half, then we say that's a one, right? So one to one ratio between what it should be in terms of a random assignment of friendships and what it is. And if I'm not connected at all, I'd have a zero. None of my friends would be wealthy.
Speaker 2
Yeah, so it goes from zero to one where zero is, if you're poor, you've got no above, you've got no rich friends or you've got no people above a medium income. And if it's a one, you've got 50%. So you're aware we should be if there was no restraints or constraints on how we function as human beings.)
- Time 0:14:21
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(highlight:: Economic Connectedness within Communitied is Highly Correlated with Economic Mobility
Key takeaways:
• The concept of economic connectedness has a significant impact on an individual's economic mobility.
• Economic connectedness is four to five times stronger in predicting economic mobility compared to other variables.
• Traditional economic indicators that correlate with mobility become less relevant when considering economic connectedness.
• Social cohesion and civic engagement have little effect on social mobility.
• Social mobility is primarily influenced by the level of economic connectedness.
Transcript:
Speaker 2
So this concept of economic connectedness, did it make a difference?
Speaker 1
Yeah, so it was eye opening because the idea here was, yeah, these are the connections that are going to help me have information about whether or not I can get a job or what it takes to study And get into university and so forth. So these can be really valuable connections. So we hypothesize, yeah, this should make a difference. And maybe it'll pop out more than these other measures. It's just by far the most highly explanatory variable on predicting somebody's economic mobility. It's four to five times stronger than these other variables in terms of correlations. And moreover, once you start looking at it, a lot of the normal things that you put in about whether a place is poor or whether unemployed in the area or something, you look at all these Normal economic indicators that correlate with mobility, they stop mattering once you start looking at this economic connectedness. So it's not only really strong, but it seems to dominate a lot of the other social capital measures and a lot of other usual explanatory variables in terms of explaining what's happening. So it seems that these connections really tell us a lot about somebody's prospects of moving out of poverty.
Speaker 2
So you study fundamentally concluded that social cohesion, civic engagement, yes, they do good things, but in terms of mobility, they don't matter. And then social mobility is dominated by this concept of economic connectedness.)
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