The Economic Approach to Social Capital

40 Pages Posted: 12 Jun 2000 Last revised: 18 Oct 2010

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

David Laibson

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Bruce Sacerdote

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2000

Abstract

To identify the determinants of social capital formation, it is necessary to understand the social capital investment decision of individuals. Individual social capital should then be aggregated to measure the social capital of a community. This paper assembles the evidence that supports the individual-based model of social capital formation, including seven facts: (1) the relationship between social capital and age is first increasing and then decreasing, (2) social capital declines with expected mobility, (3) social capital investment is higher in occupations with greater returns to social skills, (4) social capital is higher among homeowners, (5) social connections fall sharply with physical distance, (6) people who invest in human capital also invest in social capital, and (7) social capital appears to have interpersonal complementarities.

Suggested Citation

Glaeser, Edward L. and Laibson, David I. and Sacerdote, Bruce, The Economic Approach to Social Capital (June 2000). NBER Working Paper No. w7728. Available at SSRN: https://ssrn.com/abstract=232110

Edward L. Glaeser (Contact Author)

Harvard University - Department of Economics ( email )

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David I. Laibson

Harvard University - Department of Economics ( email )

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Bruce Sacerdote

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