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Why do poor people remain poor?

Posted October 6, 2014
Image credit: Giannis Angelakis via Flickr, CC BY 2.0

Image credit: Giannis Angelakis via Flickr, CC BY 2.0

Economically disadvantaged individuals living in highly unequal societies are trapped in a vicious circle: they remain poor, because they are poor.

This is the conclusion of the new study carried out by Natalia Letki at University of Warsaw and Inta Mierina at University of Latvia. “These conclusions are particularly important in the context of decreased welfare spending in times of economic crisis and financial austerity,” they say.

Reports on rising income inequality and declining social cohesion inspired studies exploring what is the causal link between social inequalities and social capital. “This research has demonstrated that in addition to depressing social interaction and participation, increasing inequality magnifies differences in civic and political participation between those at the top and those at the bottom of the social structure.

Existing studies have not, however, examined the effect of inequality and polarization on properties of social networks, such as their size and their use to access resources,” the sociologists say. Young Eastern European scholars, Letki and Mierina attempted to fill this gap. In order to achieve this ambitious goal, they analyzed rich dataset containing information on social networks and access to resources in 21 different countries.

Data analysis unlocked one of the mechanisms sustaining economic inequality. “They are resource-poor and in need of resources, but they have little to offer in an exchange and/or are disregarded and marginalized because of their social status, which restricts them to searching for help within the closest circle of family and friends, who are equally resource poor,” authors of the article explain.

Moreover, new relationships are usually formed with individuals who are similarly deprived. In contrast, rich people manage to consolidate and even institutionalize their advantages. These results obviously have important policy implications.

“Policy efforts should focus on providing well-targeted transfers that will enable the distance between particular groups to be reduced, thus crowding in social support. Otherwise, the unequal distribution of social network capital resulting from social and economic exclusion will continue to reinforce social polarization and fragmentation,” the researchers emphasize.

Article: Letkia N., Mierin I., 2014, Getting support in polarized societies: Income, social networks, and socioeconomic context, Social Science Research, 49, source link.

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