Ethnic social capital: Individual and group level sources and their economic consequences

Ethnic social capital shapes economic action by immigrants by providing information, training, and credit that is otherwise unavailable. However, prior research on the effects of ethnic social capital on economic attainment by salaried workers primarily relied on case studies of specific destinations or ethnic groups. Furthermore, prior research focused on group level effects of ethnic social capital while largely ignoring the effects of individual-level utilization of ethnic ties. This study addresses these limitations by combining data from the New Immigrant Survey and the 5% file of the 2000 US Census. This allows controlling for group differences in actual utilization of familial ties and for differences between groups in their demographic makeup, legal status, and human capital when estimating the effect of ethnic social capital. It also allows addressing the potentially divergent implications of ethnic social capital for individual and group economic attainment. Results suggest that, on both the individual and group levels, reliance on ethnic social capital is associated with lower earnings for recent legal immigrants to the US.