The relationship between social capital and economic capital
Social capital and economic capital are mutually reinforcing. Both are necessary for individuals to move out of poverty and to sustain upward mobility over time. Strong networks of trust and relationships support opportunity, while financial resources provide stability and the means to invest in the future.
The aim of this work is to identify the barriers that impede the formation and transmission of social capital, and to outline policy approaches that address those barriers directly.
Because individuals experience different combinations of social and economic resources, it is useful to distinguish between contexts. The framework below presents a simple way of organizing these differences.
The horizontal axis represents economic capital, ranging from low to high. The vertical axis represents social capital, ranging from weak to strong relational networks. Together, these dimensions produce four distinct environments:
Low social capital and low economic capital
High social capital and low economic capital
High social capital and high economic capital
Low social capital and high economic capital
This framework provides a basis for understanding how different combinations of social and economic resources shape opportunity, and how policy can be more precisely targeted in response to support upward social and economic mobility.
1. Low social capital and low economic capital
(Entrenched poverty)
Context
Individuals in this quadrant lack both strong relational networks and material resources. They have limited access to stable family structures, trusted community institutions, and the financial assets that support long-term security.
Problem
Weak social capital constrains access to opportunity, while low economic capital limits the ability to invest in education, housing, and stability. These conditions reinforce one another, contributing to persistent and often intergenerational poverty.
Policy
Policy should simultaneously rebuild social capital and provide material support—strengthening families, local institutions, and relational networks while ensuring access to income support, education, and pathways to employment.
2. High social capital and low economic capital
(Connected but constrained)
Context
Individuals in this quadrant benefit from strong networks of trust, family stability, and community support, but have limited financial assets and restricted access to higher-income opportunities.
Problem
While strong social capital improves resilience and mobility, constrained access to education, training, and well-paying jobs slows capital accumulation and limits upward economic movement.
Policy
Policy should preserve and reinforce social capital while expanding access to economic opportunity—through education, workforce pathways, geographic mobility, and pro-work tax and regulatory frameworks.
3. High social capital and high economic capital
(Flourishing households)
Context
Individuals in this quadrant possess both strong relational networks and substantial economic resources. They benefit from stable family structures, effective institutions, and accumulated financial assets.
Problem
The primary risks are erosion of social capital through family or community breakdown, and loss of economic stability through policy or economic shocks that undermine long-term security.
Policy
Policy should support and reward the institutions and behaviors that sustain both forms of capital—protecting family stability, encouraging long-term investment, and avoiding disincentives that weaken social or economic foundations.
4. Low social capital and high economic capital
(Isolated affluence)
Context
Individuals in this quadrant have significant economic resources but lack strong, durable social networks. Wealth may provide personal security, but relational ties are limited or fragmented.
Problem
Low social capital can reduce well-being, weaken social cohesion, and limit the broader societal contribution of economic resources. Wealth alone does not generate the relational infrastructure needed for healthy communities.
Policy
Policy should encourage the deployment of capital in ways that strengthen social capital—through philanthropy, local investment, institution-building, and employment that fosters stable relationships and community engagement.
Conclusion
The Social Capital Campaign advances policy solutions across all four quadrants. Social capital is foundational to economic mobility: strong relationships in childhood and adulthood underpin the accumulation of capital over time. Strengthening social capital is therefore essential not only for individual well-being, but for long-term economic growth and a more stable and cohesive society.