Social capital --> real capital

A gigantic new study shows that friendships between poor children and more affluent people is correlated with higher income in adulthood. Going to school together isn’t enough. The key is social interaction – social capital that leads to real capital.

https://www.nytimes.com/interactive/2022/08/01/upshot/rich-p…

**Vast New Study Shows a Key to Reducing Poverty: More Friendships Between Rich and Poor**

**By Claire Cain Miller, Josh Katz, Francesca Paris and Aatish Bhatia, The New York Times, Aug. 1, 2022**

**...**

**Social capital, the network of people’s relationships and how they’re influenced by them, has long intrigued social scientists. Researchers have found that ties to more educated or affluent people, starting in childhood, can shape aspirations, college-going and career paths.**

**But the new study is the first to show that living in a place that fosters these connections causes better economic outcomes, using a significantly larger data set than other studies, covering 21 billion Facebook friendships. [Holy Toledo! That's what I call a data set! -- W]...**

**For each low-income Facebook user, the researchers determined where the person was currently living, and how many high-income friends they had. That gave them a measure of how economically connected each neighborhood was. Then they compared the new data with earlier research that used tax records to measure how much a particular neighborhood raised low-income children’s economic prospects.**

**The researchers were also able to link almost 20 million users to both their high school and to their parents on Facebook. Using those ties, they repeated their analysis, this time on high school connections between children of rich and poor parents, to measure the impact of relationships made early in life. ....**

**Each analysis had the same result: The more connections between the rich and poor, the better the neighborhood was at lifting children from poverty. After accounting for these connections, other characteristics that the researchers analyzed — including the neighborhood’s racial composition, poverty level and school quality — mattered less for upward mobility, or not at all. ...** [end quote]

In 2010, I volunteered as an advisor for a local elementary school’s Science Fair Club. In the club, I met a quiet but very bright 10 year old girl, the third daughter in a family whose dad was a firefighter and mom was an office worker. The little girl, N, won a blue ribbon for best in age group in the Seattle Science Fair – a stunning achievement, considering how many scientists and engineers live in Seattle.

N’s mother told me that N seemed to have no interests and that she would probably end up working at Wal-Mart. I told N’s mom that I would like to mentor N in order to teach her the pathway from the working class into the upper middle class.

Every Sunday for 8 years, N’s mother or grandmother brought N over to my house for tea. N read books aloud. N studied biology, chemistry, geography. N practiced public speaking. N discussed the internal politics of her softball team and 4H group with her mother and grandmother. N learned about long-term planning. N learned about budgeting and financial responsibility. N learned about aiming toward college. I arranged a summer volunteer job for N, helping in a physical therapy exercise program for Parkinson’s patients at the gym I attended, a job she loved.

Although N jealously guarded her mentoring time from her two older sisters, her mom listened attentively. Everything I told N also applied to the older girls.

It is now 2022.

N’s oldest sister graduated with an engineering degree from California Polytechnic Institute about 4 years ago and is working as an engineer. N’s middle sister just graduated from veterinary school with a specialty in large animals.

N got over $100,000 in college scholarship money. N is a year away from earning her Ph.D. in physical therapy.

It’s worth reading the article in the N.Y. Times because it contains a lot of data. But the primary conclusion has been known for thousands of years. Friendship with a wealthier person, whether one’s own age or older, can give a young person invaluable training toward the pathway toward wealth.

Flyerboys has written movingly about his efforts along these lines.

It’s always nice when data back up social knowledge with scientific facts.

Providing a poor person with social capital is rare in our polarized society. But it can be a win-win situation. The satisfaction of helping someone for the mentor. Learning the system and pathway to success for the mentee.

Wendy

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The power of networking! My dad used to say “It’s not ‘who you know’ but ‘who knows you’ that counts.”

The Captain

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Huh…I know when something seem too simplistic, I’m absolutely missing the point. For the life of me, this study seems to imply to value of role models - not just affluent and poor relationships but, models which demonstrate Healthy Lifestyle, Respect, Self-Awareness, Commitment to Values and Goals.
Yes, the affluent may model in ways that influence poor and all Society.
Great Study.
GLTA Fools,
paul

1 Like

<this study seems to imply to value of role models - not just affluent and poor relationships but, models which demonstrate Healthy Lifestyle, Respect, Self-Awareness, Commitment to Values and Goals.>

The unique part of the study is the use of big data to show the significant effect of friendship on wealth outcome.

Role models can be helpful even if they are distant, even symbolic (such as religious figures). But a role model who is also a friend – who brings personal emotional resonance and a lasting reciprocal relationship – is more effective than a distant symbol.

The focus of the study was poverty/ wealth because they were able to quantify this. Everyone recognizes that what you say is true, but it’s not easy to analyze qualitative values.

Wendy

Due to hanging out on TMF, this board, the old Retire Early Homepage, etc, I have been financially ‘educated’ about many topics that have resulted in me being much better off financially, than I would have been had I followed in my parents, siblings, other relatives, and socio-economic friends.

I consider TMF a role model as described in the article.
The WILLINGNESS of the board posters to open up about how they view various financial choices, has been LIFE CHANGING!

Most folks do NOT openly discuss financial matters with strangers.

THANK ALL OF YOU!

:slight_smile:
ralph

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Ralph

Right back at you, as you are a long time favorite fool of mine and solid contributor.

david fb

But the primary conclusion has been known for thousands of years. Friendship with a wealthier person, whether one’s own age or older, can give a young person invaluable training toward the pathway toward wealth.

That’s an important part of it. But the more fundamental point of the social capital literature, including this study, is that what matters most are robust social networks that connect a person to a wide range of opportunities and possibilities.

A complementary body of resource, which reveals the lifelong limitations that disconnected individuals face, often in impoverished and racially marginalized neighborhoods, goes under the rubric of “networks to nowhere.”

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