The Effects of Local-Level Economic Inequality on Social Capital: Evidence from Andhra Pradesh, India

How do changing levels of local economic inequality affect households’ social capital? This article contributes to answering this question by examining the impact of village-level economic inequality in Andhra Pradesh on household levels of bridging and bonding social-network capital, using Two-Stage Least-Squares regressions of data from household surveys conducted between 2002 and 2014 by the Young Lives programme. The results of the study suggest that as local economic inequality rises, households’ bridging social capital, measured through participation in efforts to resolve broader communal issues, declines whilst their bonding social capital, measured through membership in relatively demographically and socio-economically homogeneous voluntary associations, increases. Existing research suggests that the consequently growing fragmentation of communities along demographic and socio-economic division lines is likely to contribute to social conflicts.