Social capital, social protection, and multi-dimensional poverty: Evidence from Chinese migrant workers' experience

Abstract

Using an online survey, we examine the relationship between migrant workers' social capital, social protection, and multi-dimensional poverty alleviation. To address endogeneity concerns, we employ two-stage least squares analysis and seemingly unrelated regression estimation. Our findings indicate that migrant workers' social capital in cities significantly reduces poverty, as those with higher social capital gain greater access to social protection. Additionally, social protection lowers poverty levels and mediates the impact of social capital on poverty alleviation, leading to more equitable outcomes. Among the three dimensions of social capital—social networks, reciprocal connections, and social trust—social networks play the most significant role in poverty alleviation. Social protection partially mediates the effects of social networks and reciprocal connections but fully mediates the impact of social trust on poverty alleviation. These findings highlight both the beneficial and exploitative aspects of social capital. To mitigate the “elite capture” effect—where unequal distribution of social capital disadvantages certain migrant workers—the government should implement more inclusive social protection policies.