The Economic Approach to Social Capital

Edward L. Glaeser, David Laibson, Bruce Sacerdote

NBER Working Paper No. 7728
Issued in June 2000
NBER Program(s):   LE   LS

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.

(1394 K)

Published: Glaeser, E. L., D. Laibson and B. Sacerdote. "An Economic Approach To Social Capital," Economic Journal, 2002, v112(483,Nov), 437-458.

This paper is available as PDF (1394 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX