Social Capital and Income Inequality : An Empirical Analysis

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  • Economic and Political Weekly Vol.60; No.29 - 19 July 2025 pp. 51-58
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Summary: The relationship between income inequality and social capital is examined. Using the India Human Development Survey, which includes variables related to formal and informal social capital, income inequality is seen to adversely impact the formation of formal social capital while significantly contributing to the development of informal social capital in India. Further, evidence of a lower level of social capital among low-income individuals is observed. There is substantial inequality in income distribution that amplifies social capital inequality. Traditional income redistributive policies may prove ineffective when inequality becomes deeply ingrained in society.
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The relationship between income inequality and social capital is examined. Using the India Human Development Survey, which includes variables related to formal and informal social capital, income inequality is seen to adversely impact the formation of formal social capital while significantly contributing to the development of informal social capital in India. Further, evidence of a lower level of social capital among low-income individuals is observed. There is substantial inequality in income distribution that amplifies social capital inequality. Traditional income redistributive policies may prove ineffective when inequality becomes deeply ingrained in society.

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