The Economic Approach to Social Capital

41 Pages Posted: 15 Mar 2001  

Edward L. Glaeser

Harvard University - John F. Kennedy School of Government, 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: March 2001

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: (l) 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 and Sacerdote, Bruce, The Economic Approach to Social Capital (March 2001). Harvard Institute of Economic Research Paper No. 1916. Available at SSRN: https://ssrn.com/abstract=263420 or http://dx.doi.org/10.2139/ssrn.263420

Edward L. Glaeser (Contact Author)

Harvard University - John F. Kennedy School of Government, Department of Economics ( email )

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David I. Laibson

Harvard University - Department of Economics ( email )

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Bruce Sacerdote

National Bureau of Economic Research (NBER)

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