Social Capital and Women’s Labor Force Participation in Chile Feminist Economics

Feminist Economics

Ismael Puga and Daniela Soto

During the past three decades, the concept of social capital has gained growing salience, especially among international agencies (such as the World Bank and the United Nations Economic Commission for Latin America and the Caribbean) focused on “community-driven” development for poverty alleviation. A notorious aspect of these policies based on social capital is the key role attributed to women and their participation in the labor market.

In the case of Chile, this kind of policy has been especially dominant. Compared to the rest of the OECD, and the Latin American region, Chilean women are particularly excluded from the labor market. By 2017, one in two women age 24 or older participated in the labor force.

However, using social capital as a driver for increasing economic participation often overlooks the differences between two types of social capital: small, homogeneous, and tight networks of cooperation, which are called “bonding social capital” in the literature, and diffuse networks enabling access to larger and more different resources, which represent “bridging social capital.” Depending on the context, the strength of social ties and the potential resources these ties open for individuals, social capital might actually strengthen and perpetuate social inequality rather than combat it. Most importantly, policies relying on women’s social capital shift the state’s responsibility for regulating labor markets and providing fair conditions for women’s labor (through care and other policies) to women and their ability to mobilize networks. Ismael Puga and Daniela Soto’s main question is then: Does social capital actually foster women’s labor force participation in Chile?

Methodology. Puga and Soto use data from the Encuesta Nacional de Estratificación Social (ENES; National Survey on Social Stratification) from Chile, to analyze the causal link between different types of social capital (bonding social capital and bridging social capital) of Chilean women and their entry into the labor force. Their analyses are based on women between 18 and 60 years old, who are either the main breadwinner of the household or the partner of the main breadwinner. Using probit predictive models, Puga and Soto test whether women with higher social capital tend to join the labor force more often once other relevant factors are taken into account.

Main findings. Puga and Soto find that the relation between women’s labor force participation and social capital exists, but the link between both variables is complex and goes both ways. Only some types of social capital are relevant for labor force participation: namely, networks with weak but far-reaching contacts including higher-status individuals. There are neither empirical nor theoretical reasons to believe that women have better access to such networks than men. Furthermore, this type of social capital is only relevant for the economic integration of the richest women, failing to increase labor force participation among women of the other 80 percent of households. Thus, Puga and Soto conclude that policies targeted at women’s economic integration based on the presumption that women have more social capital than men are deeply flawed.

Policy implications. Puga and Soto’s analysis shows that fostering social capital as a means for women’s economic integration and reduction of gender inequality is a flawed strategy. For most women, there are other, more resilient factors requiring deeper reform, which keep them from joining the labor force. Networks and contacts will not level the field for women as long these other factors – family roles, wage inequality across gender and class, childcare and healthcare services and regulations, among others – are not addressed. Policies based on social capital, in the authors’ view, displace the required attention from such issues and make women from poor and working-class families, and their social entourages, falsely “responsible” for their own exclusion.

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