Social capital and the distribution of household income in the United States: 1980, 1990, and 2000

Social capital is a person or group's sympathy or sense of obligation for another person or group. The objects of sympathetic feelings have social capital. Those holding sympathetic feelings for others provide social capital. Because social capital providers internalize the consequences of their choices on the objects of their social capital, they trade with each other on different terms and at different levels than would occur in arm's length transactions, all other things equal. Furthermore, changes in the distribution of social capital alter the terms and level of trade which in turn alter the distribution of income.