Social capital and economic outcomes for immigrants and ethnic minorities

The ambiguities of “social capital” can be clarified by reformulating it as a group-based resource derived from social relations, the effectiveness of which is contingent upon the extensity and intensity of social ties and the group’s resources, and the creation of which may involve a potential cost to an individual. This paper reviews the literature on immigrants and ethnic minorities to see how ethnic attachment as a form of social capital has affected the economic well-being of immigrants and minorities, and refines the concept of social capital. Studies of “ethnic attachment” and of the “ethnic mobility trap” have stressed the “penalty” of ethnic ties and affinity. However, studies on the ethnic enclave economy and transnational communities have attributed the prosperity of the enclave economy and the economic success of some ethnic diasporas to ethnic networks. The paper concludes that social capital can be enabling for individuals and groups, subject to the level of other forms of capital present. But social capital cannot replace other forms of capital to produce unrealistic outcomes beyond the material limits of its contextual boundaries. Thus, social capital is a useful concept, not as a universal virtue, but as a situation-based capacity bounded in specific social and class contexts.