The Impact of Social Capital on Labor Force Participation: Evidence from the 2000 Social Capital Benchmark Survey

Abstract

Objectives. Few studies apply the concept of social capital to labor force participation. In this research, I study the relationship between friendship networks and labor force participation as represented by employment and hours worked. Methods. I test five hypotheses representing social capital with network structure, network quality, and network diversity using nationally representative data from the 2000 Social Capital Benchmark Survey. Since this survey enables comparisons across racial/ethnic and gender groups, I am also able to specify how social capital interacts with race/ethnicity and gender to influence labor force participation, while controlling for other prominent theoretical concerns such as human capital theory. Results. I find that friendship networks are generally positively related with increased labor force participation. Further, I find significant social capital differences based on race/ethnicity and gender. Conclusions. I illustrate that social capital can be applied across a broader racial/ethnic/gender spectrum. The findings suggest that programs that attempt to bring valuable labor market information to individuals and communities lacking employment–related information are likely to be effective in reducing inequality, especially if combined with programs for developing human capital.