David Gyarmati and Darrell Kyte, Social Research and Demonstration Corporation
The authors are with Social Research and Demonstration Corporation.
David Gyarmati is a Research Associate in the Ottawa Office and Darrell Kyte is a Researcher in the Sydney Office.
The need for a clear and measurable definition of social capital is exemplified in the Community Employment Innovation Project (CEIP), a large-scale research demonstration project being managed by the Social Research and Demonstration Corporation (SRDC). This article introduces CEIP and its unique approach to measuring social capital formation through social networks, which was presented in a recent SRDC working paper by Kate Johnson (2003). The article begins with a brief overview of CEIP. This is followed by a discussion of various definitions of social capital, which are operationalized in a model of social network formation used in CEIP. The model is then discussed in more detail, and the measurable aspects of social network formation and the specific collection instruments used in CEIP to obtain these data are reviewed. The paper concludes with a more detailed discussion of the possible mechanisms by which CEIP may influence these aspects of social networks.
CEIP – An Innovative Alternative for the Unemployed
The Community Employment Innovation Project (CEIP) is a long-term research and demonstration project designed to test an alternative form of income support for the unemployed, which aims to encourage employment while supporting local community development. CEIP is sponsored by Human Resources Development Canada (HRDC) and the Nova Scotia Department of Community Services (DCS). The project, which began in 1999 and is continuing until 2008, is managed by the SRDC, a not-forprofit research organization.
CEIP grew out of the belief that new government initiatives to improve the economic well-being of individuals in disadvantaged communities must support local efforts to create a sustainable economy. The Cape Breton Regional Municipality (CBRM) — the principal industrial area of Cape Breton, Nova Scotia — was selected as the test site. This area has experienced a steady and protracted erosion of its industrial base, which was founded on the steel and coal industries. Past efforts to diversify the economy using traditional development approaches have had limited success, and the regional unemployment rate has remained high relative to provincial and national rates. The area, however, has a significant history of grassroots involvement in community development. This tradition of local activism and the availability of expertise and organizational infrastructure, along with a pressing need to address chronic high unemployment, make industrial Cape Breton a suitable location in which to test the CEIP program model.
CEIP, Employability, and Community Capacity
Eligible individuals in the CBRM were offered the opportunity to exchange their entitlements to Employment Insurance (EI) or income assistance (IA) benefits for a “community wage” that is earned by working on projects developed and operated at the local level. Eligible volunteers are able to take part in community-based projects for up to three years, which provides them with a significant period of stable, earned income and an opportunity to gain experience in a variety of settings, acquire new skills, and expand their networks of contacts. In short, beyond addressing the immediate need for employment, CEIP hopes to influence participants’ longer-term employability by improving both their human and social capital.
An important feature of CEIP’s design is the central role given to local communities to identify and prioritize local needs, and to develop, approve, and implement projects to meet those needs. CEIP hopes that the activities residents undertake in the mobilization and organizing of local resources to generate project-based jobs will help enhance community capacity. It is through both the process and the product of these efforts that CEIP may improve and sustain a central element of capacity building - the social capital of local communities.
Definitions of Social Capital Relevant to CEIP
Jacobs (1961) was the first to provide evidence of the importance of social capital to a healthy functioning society. She believed neighbourhood networks are essential to fostering healthy, liveable cities. Bourdieu (1986: 243, 248) suggested that social capital is the value of social obligations or contacts formed through a network.
Networks of connected individuals are acknowledged in many definitions of social capital. According to Côté (2001), “while human capital is embodied in individuals, social capital is embodied in relationships.” To Putnam (2000: 19), “social capital refers to connections among individuals – social networks and the norms and reciprocity and trustworthiness that arise from them.” Similarly, Stone (2001: 4) sees social capital “as networks of social relations which are characterized by norms of trust and reciprocity.” It is this micro-level explanation that emphasizes the role of social networks and social ties that is most relevant to CEIP.
However, Woolcock (2001) believes it is also useful to distinguish between social capital and its outcomes and has noted that definitions of social capital have a tendency to include both networks and values like trust and reciprocity. Woolcock advocates a definition that focuses on what social capital is rather than what it does and, in his reasoning, trust is a consequence of social capital rather than an element of the definition.
Despite the varying definitions that have emerged in the literature, Stone (2001: 4) has identified a common similarity, and points out that three of the most notable social capital writers, Bourdieu (1986), Putnam (1993), and Coleman (1988) “understand social capital as a resource to collective action concerning economic well being, democracy at the nation state level, and the acquisition of human capital in the form of education.” Described as such, there is a relational component to the definition. The authors view social capital as networks leading to various outcomes. It is necessary to see social capital as a resource – through networks – to collective action rather than view the outcome of such action as existence of social capital.
A Model of Social Capital Formation
Adopting a definition of social capital that draws on a micro-level explanation that emphasizes the role of social networks and social ties will allow social capital to be measured separately from its outcomes. However, social capital, even with a micro-level definition based on social networks, has not been formally modelled until now. To determine if there are any effects of CEIP on social networks, measurable aspects of network formation need to be clearly defined. This requires a model of social network formation through which social capital develops.
In her paper, Johnson (2003) investigates a model of social capital formation, which uses individual incentives to create or sever network links. It is based on the propositions that relationships can be both beneficial and costly, and that individuals rationally form and sever relationships according to the cost and benefit of those relationships. Being connected greatly benefits an individual, yet maintaining relationships has a cost. As a consequence, individuals limit the number of their active relationships. As network links are formed and maintained individuals begin to accumulate social capital. Like any other asset, social capital pays a return and depreciates over time.
In Johnson’s model, each individual’s utility depends on the net benefits from each relationship in each period of time. The net benefit in maintaining relationships over time is a function of several factors, which are described in more detail in Johnson (2003). Briefly, the net benefits of individual connections in a social network are determined by the value of the active links, not only from current interactions with an individual, but also from the social capital and costs of maintaining relationships that are inherent in the entire history of the relationships.
The model implicitly allows active connections to accumulate social capital over time while also incorporating the concept of depreciation. Furthermore, individual connections can also vary in their ability to accumulate social capital based on how well the individuals interact. As one would expect, the size of network also influences the net benefit. However, more is not always better, as being connected to too many individuals can cause congestion, where the net benefit is less than anticipated. Finally, the model incorporates a maintenance cost for individuals in maintaining relationships. It is designed to allow for different costs, which ensures that each individual is faced with a variety of potential relationships ranging from inexpensive to very costly.
Johnson also reviews the implications of this type of model on social network formation. Most importantly, it has implications for how the size, homogeneity, and density of social networks, and hence social capital, evolve and are influenced by the factors described in the model. Size, homogeneity, and density are clearly definable aspects of social networks that can be measured separately from outcomes on, for example, labour market experiences or quality of life.
Measuring Social Capital in CEIP
The CEIP research design includes an experimental participant impact study, which employs a random assignment design. Participants are randomly assigned to either a program or control group. The program group receives the CEIP treatment while the control group, ineligible for the program, serves as a counterfactual – a measure of what the outcome would have been in the absence of the program. Any differences that are observed over time in the experiences of the two groups can be attributed with confidence to CEIP, because random assignment ensures that there are no pre-existing differences between the groups.
The experiences of participants in the program and control groups are assessed through a series of followup surveys and administrative data sources. Follow-up surveys, conducted at 18, 40, and 54 months after random assignment, are the key source of data on the labour market outcomes and quality of life of those in the study and will provide the basis for measuring the impacts of CEIP.
Follow-up surveys also include modules on social network formation that will be used to assess the evolution of the social networks of study participants through the study period. Consistent with the implications of the above model of social capital formation, these survey modules collect data on the size of participants’ social networks as well as their homogeneity and density. Specifically, they include a series of questions designed to elicit a list of contacts to which participants could turn to for help in the following areas: household activities, specialized advice, emotional support, and help with finding a job. Beyond overall size of networks, their homogeneity is captured through additional questions that assess the similarity of the identified individuals on a range of characteristics. Finally, the density of networks is assessed through questions designed to determine the nature and interconnectedness of these relationships. Because these data are collected for both program and control group members, consistent and reliable estimates of the impact of CEIP on social networks can be determined – separate from outcomes on labour market experiences and quality of life.
In addition to the participant impact study, the CEIP research design also includes a comprehensive study of community effects. This involves a multiple-methods research design that relies heavily on both a “theory of change” approach and a quasiexperimental comparison community design. A range of data collection methods is used in this design including a longitudinal community survey, administrative indicators, and a series of qualitative research approaches. Similar to the participant impact study, indicators related to both outcomes and the evolution of social networks are collected, which will allow the effect of CEIP on the evolution of social capital and community wellbeing, capacity, and cohesion to be analyzed separately. For example, the longitudinal survey will be administered in three waves to a random sample of community members, in both program and comparison communities. It includes questions on economic activity and employment, household composition, health, time use, community participation, and social networks. The social network questions in the community survey are similar to those in participant follow-up surveys in that they assess network size, homogeneity, and density.
Mechanisms by which CEIP Might Influence Social Capital
CEIP may influence the social capital of both the participants enrolled in the program and of the members of participating communities where projects are being approved and conducted. The mechanisms by which CEIP can influence social capital development of both participants and the wider community members are explored below.
First, CEIP has the capacity to affect social capital in communities by bringing individuals together who might not otherwise meet. Individuals include members of the volunteer community boards, individuals from sponsoring organizations and members of the community at large. Social networks can evolve through both the process of communities mobilizing their resources to participate in CEIP and from the actual output of the projects they develop. The process of engaging the community, of electing community boards, their setting priorities and working to approve projects, allows social capital to accumulate among members of the boards and sponsoring organizations. The delivery of new products, or the enhancement of existing products in the community, once projects are approved and active, has the potential to bring diverse groups of people together.
Second, CEIP enhances the potential for participants to improve social capital throughout their participation in the project. CEIP guarantees income to participants for three years and this income stabilization should mean individuals are more reliable in meeting the maintenance cost of their relations. Glaeser (2001) notes that individuals with a high probability of mobility are least likely to invest in social capital. CEIP provides individuals with an opportunity to settle for three years, thus keeping participants in their communities. Glaeser (2001: 3) also notes “that individuals in occupations that are more social will invest more strongly in social capital.” In many instances, CEIP projects are in the social economy or at least their outputs are socially oriented, motivated for the betterment of the wider community.
Although the succession of work placements in community-based jobs is the primary mechanism for altering social capital of participants, it is not achieved solely by providing opportunities for contact with other participants. Work placements should enhance the networks of participants by bringing them into contact with a broad range of people – those directly involved in CEIP (other participants, project sponsors, training organizations), and also members of the community at large – through the output of the projects themselves. This could involve individual members of the community who use the service and products of the projects, or other organizations involved in the process.
More specifically, CEIP has the potential to enhance the bonding, bridging, and linking social capital of participants and community members.
Putnam (2000) refers to bonding social capital as that which is exclusive. Putman maintains that such a form of social capital reinforces exclusive identities and homogenous groups. CEIP occurs in specific communities throughout the CBRM and may reinforce bonds among members in each community. Many participants are in work placements within their home communities and may develop such bonding social capital with other participants, members of sponsoring organizations, and members of the community who use the output of the projects. Furthermore, most projects that are approved by each community board draw on resources and function largely within the boundaries of their own community. Members of each community – those involved with the volunteer board, in sponsoring organizations, or those using the output of projects that bring individuals together – have the opportunity to enhance bonding social capital as well.
However, CEIP also has the potential to enhance bridging or inclusive social capital, which Putman (2000: 22) acknowledges “are better for linkage to external assets and for information diffusion.” Granovetter (1973) has noted weak ties that link individuals to more distant contacts can be of more value than strong ties. Although participants were randomly selected from communities throughout the CBRM, there are only five participating CEIP communities that develop projects and receive CEIP workers. As a result, many participants are placed in communities throughout industrial Cape Breton, outside of their hometown, giving them the opportunity to increase more distant contacts and enhance bridging social capital.
Finally, linking social capital refers “to relations between different social strata in a hierarchy where power, social status, and wealth are accessed by different groups” (Côté, 2001: 3). Participants may develop linking social capital by meeting individuals, potentially project sponsors, who possess extensive social networks. Before receiving CEIP participant workers, project sponsors are required to demonstrate to community boards that they have adequate resources, both financial and otherwise, for a successful project. In many cases, it is prominent members of the communities and those with greater access to community resources and existing networks, who come forward to sponsor projects. This gives participants the opportunity to expand their networks and gain access to resources previously unavailable, beyond what they would have been in a position to develop without CEIP.
Initial surveys with CEIP study participants and the first wave of community surveys provide a baseline measure of social networks for study participants and the members of CEIP and comparison communities in the CBRM. However, to assess the effect of CEIP on network formation and social capital as well as its associated outcomes, data from additional follow-up surveys are required. The 18-month follow-up survey with study participants will not be in the field until early 2004 while the follow-up wave of the community survey is due to be completed by June of next year. As a result, the first report of effects of CEIP on social capital and network formation can be expected in early-to-mid 2005.
Although results from the first CEIP participant impact and community effects studies are more than a year away, preliminary data on approved CEIP projects and work placements may suggest possible effects on the social network formation of participants. For example, it is reasonable to expect that participants who experience a greater number and range of work assignments will have more opportunities for enhancing networks than those who work exclusively in one job for the duration of their CEIP eligibility. At the same time, too many jobs could be a limitation, as stability is also important in establishing new relationships. Early data suggest that many CEIP participants appear to have achieved a degree of balance between varied opportunities and stability of employment. Almost two thirds of participants (64 percent) have worked in more than one position during their eligibility. About a quarter (26 percent) have had two positions, while a similar proportion has held three or four jobs (28 percent). Less than 10 percent have worked in five or more jobs during their eligibility.
There also appears to be a wide range of projects and work placements that are being generated by communities. They are not all concentrated in the service of one community group or sector nor do they generate a limited number of occupational opportunities for participants. For example, projects cover a range of community sectors with no more than 15 percent of all projects in one category, including various community services, environmental, sports and recreation, church and charities, seniors, youth, and services for those with disabilities. Occupations generated from these projects include service occupations, finance and administration, education, trades and operators, natural and applied sciences, and management positions. Having a wider range of projects and work placements may enhance social capital, not only for CEIP participants, but also for those who develop, implement, and use the output of these projects within participating communities. Future reports from the SRDC will demonstrate whether social capital does in fact develop, through enhanced social networks, and what implications this has for CEIP participants and participating communities.
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