Social Capital and Relative Income Concerns : Evidence from 26 Countries

Abstract

Research on the effects of positional concerns on individuals attitudes and behaviour is sorely lacking. Therefore, using the International Social Survey Programme 1998 data on 25 000 individuals from 26 countries this paper investigates the impact of relative income position on facets of social capital, covering horizontal and vertical trust as well as norm compliance. Testing relative deprivation theory, we identify a deleterious positional income effect for persons below the reference income, the absolute size of which far outweighs that of relative income advantage. In contrast, social capital rises in absolute income, while distributional fairness perceptions partially mediate relative income effects.