Breaking Down Barriers: The Impact of Segregation on Social Capital and Economic Outcomes

Breaking Down Barriers. Does social capital indirectly affect black/white economic outcomes via entrepreneurial activities? Does the relationship between social capital, entrepreneurship, and black/white economic outcomes change when social capital interacts with segregation? Drawing from Bourdieu\u27s (1986) and Coleman’s (1990) social capital theory and prior scholars\u27 regressive view theories of segregation, I propose that 1) social capital improves entrepreneurial activities and black/white economic outcomes, and 2) segregation’s interaction with social capital has an adverse effect on entrepreneurial activities and black/white economic outcomes. To perform the analysis, data were collected at the county- level from multiple sources and aggregated into one file by the Federal Information Processing Standard code (FIPS). The significance of the findings revealed that social capital has an effect on entrepreneurial activities and black/white economic outcomes. An increase in social capital works to increase black/white household income and reduce unemployment. The findings also suggest that segregation works to reduce entrepreneurial activities