In this issue we feature 13 current papers on the theme of social capital:

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In this issue we have:

 1. Social Interactions, the Evolution of Trust, and Economic Growth - Dimitrios Varvarigos; Guangyi Xin

 2. Declining trust in growing China: A dilemma between growth and socio-economic damage - Dai, Shuanping; Elsner, Wolfram

 3. The Effect of Income on Trust: the Evidence from 2009 Crisis in Russia - Maxim Ananiev; Sergei Guriev

 4. Social capital as a key driver of productivity growth of the economy: across-countries comparison - Elzbieta Janton-Drozdowska; Maria Majewska

 5. Take a Risk - Social Interaction, Gender Identity, and the Role of Family Ties in Financial Decision-Making - Zetterdahl, Emma

 6. Social Networks, Reputation and Commitment: Evidence from a Savings Monitors Experiment - Emily Breza; Arun G. Chandrasekhar

 7. Co-worker networks and productivity growth in regions - Balázs Lengyel; Rikard H. Eriksson

 8. A Study on Settlement for North Korean Refugee in South Korean Society - Wonjung Ryu; Jae Yop Kim

 9. Differentiated Social Interactions in the US Schooling Race Gap - Luis J. Hall

10. Cooperation and Discrimination Within and Across Language Borders: Evidence from Children in a Bilingual City - Angerer, Silvia; Glätzle-Rützler, Daniela; Lergetporer, Philipp; Sutter, Matthias

11. Clean Money in a Dirty System: Relationship Networks and Land Rezoning in Queensland - Murray, Cameron K.; Frijters, Paul

12. Nudges, Social Norms and Permanence in Agri-Environmental Schemes - Kuhfuss, L.; Preget, R.; Thoyer, S.; Hanley, N.; Le Coent, P.; Desole, M.

13. Voluntary Associations, Corporate Rights, and the State: Legal Constraints on the Development of American Civil Society, 1750-1900 - Ruth H. Bloch; Naomi R. Lamoreaux

 1. Social Interactions, the Evolution of Trust, and Economic Growth

    Dimitrios Varvarigos

    Guangyi Xin

We present a model where the dynamics of trust and the process of capital  accumulation are jointly determined. Trust evolves intergenerationally, as  the process of social interactions with people from different backgrounds  creates experiences and forms opinions that are bequeathed to the next  generation, thus shaping their level of trust. The provision of public goods  and services is also a supporting factor towards the formation of trust. A  key result is the possibility of social segregation if the level of trust is  below a critical threshold. As a result, long-run equilibria are  path-dependent. Both the current level of trust and the current stock of  capital are important in determining the economy’s long-term prospects.

    Keywords: Trust, Cultural Externalities, Economic Growth

    JEL: O41 Z13

URL: http://d.repec.org/n?u=RePEc:lec:leecon:15/05&r=soc

 2. Declining trust in growing China: A dilemma between growth and

     socio-economic damage

    Dai, Shuanping

    Elsner, Wolfram

Declining general trust has become a serious social issue in China in recent  years. This paper attempts to understand and analyze this social phenomenon  from a social interaction perspective. Based on a repeated prisoners´ dilemma  game on networks, it finds that the evolution of general trust is dependent  on changes of the social interaction structure, and the increases of both  social and spatial distance may explain a decrease of the levels of  cooperation and general trust. In addition, we find that the traditional  Chinese family and clan networks culture has an ambiguous effect on general  trust, and simple reactive social "homing behavior" might be critical for  China´s future economic development. In order to recover the general trust  level, a major strategic option for China, and for fast growing countries in  economic transition in general, is to (re-)develop appropriate network  structures and properties, as our model indicates.

    Keywords: economic transition,growth and development,migration,trust,games

     on networks,China

    JEL: B52 C72 D01 D02 D30 E24 O17 O43 O53 P21 Z10

URL: http://d.repec.org/n?u=RePEc:zbw:udedao:1012015&r=soc

 3. The Effect of Income on Trust: the Evidence from 2009 Crisis in Russia

    Maxim Ananiev (UCLA)

    Sergei Guriev (Département d'économie) 

This paper draws on a natural experiment to identify the relationship between  income and trust. We use a unique panel dataset on Russia where GDP  experienced an 8 percent drop in 2009. The effect of the crisis had been very  uneven among Russian regions because of their differences in industrial  structure inherited from the Soviet times. We find that the regions that  specialize in producing capital goods, as well as those depending on oil and  gas, had a more substantial income decline during the crisis. The variation  in the industrial structure allows creating an instrument for the change in  income. After instrumenting average regional income, we find that the effect  of income on generalized social trust (the share of respondents saying that  most people can be trusted) is statistically and economically significant.

Controlling for conventional determinants of trust, we show that 10 percent  decrease in income is associated with 5 percentage point decrease in trust.

Given that the average level of trust in Russia is 25%, this magnitude is  substantial. We also find that post-crisis economic recovery did not restore  pre-crisis trust level. Trust recovered only in those regions where the 2009  decline in trust was small. In the regions with the large decline in trust  during the crisis, trust in 2014 was still 10 percentage points below its  pre-crisis level.

    Keywords: social capital; trust; business cycle

    JEL: O10 P10

URL: http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/8lt2edmul9geov3cf3fqf7h92&r=soc

 4. Social capital as a key driver of productivity growth of the economy:

     across-countries comparison

    Elzbieta Janton-Drozdowska (Adam Mickiewicz University in Poznan)

    Maria Majewska (Adam Mickiewicz University in Poznan) 

The aim of this work was to show the possible impact of social capital on  productivity of the economy. That impact can be measured by such indicators  of productivity of the economy as used in our study: the GDP, the total value  added of the economy (TVE), and the GNI per total labour force. Thus, this  paper was organized as follows: its first part presents the relationship  between the development of social capital and productivity growth of the  country in the light of the economic development theory. In this context it  is pointed out that the significance of social capital as a component of the  productivity potential of a given country increases when such country moves  to the next stages of economic development. Therefore, social capital becomes  a very important driver of the upgrading of national incomes in those  countries, in which competitive advantages are based primarily on  intellectual capital assets. The other part of the paper describes the  methodology and the results of a research conducted on a group of 100  countries in the years 2012-2013 with an aim to illustrate the link between  social capital and productivity of the economy as a whole referred to, or  indicated, in the first part of the study. The results of the research  allowed us to formulate a conclusion that without an appropriate ethical  behaviour, not only in business, the productivity growth is hampered because  it translates into a lower level of trust and unwillingness to cooperate. In  other words, as, among others, W. Bartoszewski stressed, "it is worth to be  decent".

    Keywords: welfare, social capital, knowledge economy

    JEL: I31 O11 O15 O3

URL: http://d.repec.org/n?u=RePEc:pes:wpaper:2015:no132&r=soc

 5. Take a Risk - Social Interaction, Gender Identity, and the Role of Family Ties in Financial Decision-Making

    Zetterdahl, Emma (Department of Economics, Umeå School of Business and

     Economics)

This thesis consists of an introductory part and four self-contained papers  related to individual financial behavior and risk-taking in financial  markets. <p> In Paper [I] we estimate within-family and community social  interaction effects upon an individual’s stock market entry, participation,  and exit decision. Interestingly, community sentiment towards the stock  market (based on portfolio outcomes in the community) does not influence  individuals’ likelihood to enter, while a positive sentiment increases (decreases) the likelihood of participation (exit). Overall, the results  stress the importance of accounting for family social influence and highlight  potentially important differences between family and community effects in  individuals’ stock market participation. <p> In Paper [II] novel evidence is  provided indicating that the influence from family (parents and partners) and  peer social interaction on individuals’ stock market participation vary over  different types of individuals. Results imply that individuals’ exposure to,  and valuation of, stock market related social signals are of importance and  thus, contribute to the understanding of the heterogeneous influence of  social interaction. Overall, the results are interesting and enhance the  understanding of the underlying mechanisms of social interaction on  individuals’ financial decision making. <p> In Paper [III] the impact of  divorce ­­­on individual financial behavior is empirically examined in a  dynamic setting. Evidence that divorcing individuals increase their saving  rates before the divorce is presented. This may be seen as a response to the  increase in background risk that divorce produces. After the divorce, a  negative divorce effect on individual saving rates and risky asset shares are  established, which may lead to disparities in wealth accumulation  possibilities between married and divorced. Women are, on average, shown to  not adjust their precautionary savings to the same extent as men before the  divorce. I also provide tentative evidence that women reduce their financial  risk-taking more than men after a divorce, which could be a result of  inequalities in financial positions or an adjustment towards individual  preferences. <p> Paper [IV] provides novel empirical evidence that gender  identity is of importance for individuals’ financial risk-taking.

 Specifically, by use of matching and by dividing male and females into those  with “traditional” versus “nontraditional” gender identities, comparison of  average risk-taking between groupings indicate that over a third (about

 35-40%) of the identified total gender risk differential is explained by  differences in gender identities. Results further indicate that risky  financial market participation is 19 percentage points higher in groups of  women with nontraditional, compared with traditional, gender identities. The  results, obtained while conditioning upon a vast number of controls, are  robust towards a large number of alternative explanations and indicate that  some individuals (mainly women) partly are fostered by society, through  identity formation and socially constructed norms, to a relatively lower  financial risk-taking.

    Keywords: Asset allocation; Behavioral finance; Divorce; Financial

     literacy; Financial risk-taking; Gender identity; Household finance; Panel

     data; Asset allocation; Behavioral finance; Divorce; Financial literacy;

     Financial risk-taking; Gender identity; Household finance; Panel data;

     Propensity score matching; Risky asset share; Risk aversion; Saving

     behavior; Stock market participation; Social interaction; Trust

    JEL: D01 D03 D14 D14 D83 G02 G11 J12 J16

URL: http://d.repec.org/n?u=RePEc:hhs:umnees:0908&r=soc

 6. Social Networks, Reputation and Commitment: Evidence from a Savings Monitors Experiment

    Emily Breza

    Arun G. Chandrasekhar

We conduct a field experiment with 1,300 participants in India to measure  whether individuals save more when information about their savings is  regularly shared with another member of their village (a “monitor”). We focus  on whether the monitor's effectiveness depends on her social network  position, as central monitors may be better able to disseminate information,  and more proximate monitors may be more likely to pass information to  individuals who interact with the saver most frequently. In 30 villages, we  randomly assign monitors to a subset of savers. An average monitor increases  total savings by 35%. Increasing the monitor’s network centrality by one  standard deviation increases savings by 14%, and increasing proximity from  social distance three to two increases savings by 16%. Supporting the  information-based mechanism, 63% of monitors report telling others about the  saver’s progress. Further, over a year later, villagers are more likely to  know if the saver exceeded her goal and to think that the saver is  responsible if the saver was randomly assigned to a more central monitor. We  also provide evidence that the increase in savings persists over a year after  the intervention’s end, and that monitored savers can better respond to  shocks. In the remaining 30 villages, savers choose their own monitors. We  find that savers choose monitors who are both proximate and central in the  network. Finally, we find evidence of spillovers from monitored savers onto  their non-monitored friends, suggesting another channel through which social  networks influence savings decisions.

    JEL: D14 D83 L14 O16 Z13

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21169&r=soc

 7. Co-worker networks and productivity growth in regions

    Balázs Lengyel

    Rikard H. Eriksson

This paper provides a new empirical perspective for analysing the role of  social networks for regional economic growth by constructing large-scale  networks from employee-employee co-occurrences in plants in the entire  Swedish economy 1990-2008. We calculate the probability of employee-employee  ties at plant level based on homophily-biased random network assumptions and  trace the most probable relations of every employee over the full period. We  argue that these personal acquaintances are important for local learning  opportunities and consequently for regional growth. Indeed, the paper  provides the first systematic evidence for a central claim in economic geography: social network density has positive effect on regional growth  defined as productivity growth. Interestingly, the most robust effect of  density on growth was found in a segment of the co-worker network in which  plants have never been linked by labour mobility previously.

    Keywords: social network, random network with homophily bias, probability

     of tie, labour mobility, regional productivity growth, panel regression

    JEL: D85 J24 J61 R11 R23

URL: http://d.repec.org/n?u=RePEc:egu:wpaper:1513&r=soc

 8. A Study on Settlement for North Korean Refugee in South Korean Society.

    Wonjung Ryu (Yonsei University)

    Jae Yop Kim (Yonsei University)

Purpose: This study attempts to examine the effects of social maladjustment  and social loneliness on suicidal behavior among North Korean refugee women  in South Korea, and to verify the effects of social welfare programs designed  to prevent suicidal behavior among these population. Methods The  self-reported survey questionnaires were performed among 156 North Korean  refugee women. Frequency analysis and multiple regression analysis were used  to identify the effects of social maladjustment and loneliness on suicidal  behavior and the effectiveness of social welfare program. Results Results  showed that 45.5% of women had suicidal attempts in the past year. After  controlling for marital status, level of depression, age, and duration of  stay in South Korea, social maladjustment were not associated with suicidal  behavior. However, social maladjustment and suicidal behavior had  statistically significant relationship via social loneliness as a full  mediator variable. Conclusion Failure in social maladjustment is a  significant risk factor of suicidal attempt through social loneliness as a  mediator. Thus, the study suggests for developing appropriate social network  programs and family support program in order to integrate them into Korean  society.

    Keywords: North Korean Refugee Woman, Suicidal Behavior, Social

     Maladjustment, Social Loneliness

    JEL: I39 Z00 I38

URL: http://d.repec.org/n?u=RePEc:sek:iacpro:1003707&r=soc

 9. Differentiated Social Interactions in the US Schooling Race Gap

Luis J. Hall (Universidad de Costa Rica)  The main purpose of this paper is to study how the observed differences in  educational achievement of whites and nonwhites teenagers in the US can be  explained within a context of social interactions with differentiated agents,  where individuals differ in how they value their interactions with  individuals of their same type and individuals from the opposite type. We  write a model where teenagers are allowed to interact with other teenagers  and their degree of social interaction is differentiated inasmuch as whether  they interact with their own group or other groups. Following an approach of  differences in conditional variances, the conditions for the identification  of the coefficient of differences in social interactions are established. Our  estimation using the US census data on teenagers sustains the conclusion that  there exist differences in the interaction coefficient between individuals of  different types. Individuals will value more their interaction with  individuals from their own types as opposed to individuals in the opposite  type.

URL: http://d.repec.org/n?u=RePEc:fcr:wpaper:201403&r=soc

10. Cooperation and Discrimination Within and Across Language Borders:

     Evidence from Children in a Bilingual City

    Angerer, Silvia (IHS Carinthia)

    Glätzle-Rützler, Daniela (University of Innsbruck)

    Lergetporer, Philipp (Ifo Institute for Economic Research)

    Sutter, Matthias (University of Cologne) 

We present experimental evidence from a bilingual city in Northern Italy on  whether the language spoken by a partner in a prisoner's dilemma game affects  behavior and leads to discrimination. Running a framed field experiment with 828 six- to eleven-year old primary school children in the city of Meran, we  find that cooperation generally increases with age, but that the gap between  cooperation among in-group members and cooperation towards children speaking  another language is considerable and increasing with age. This gap is due to  both, in-group favoritism and language group discrimination.

    Keywords: cooperation, discrimination, language, children, experiment

    JEL: C91 C93 D03

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9039&r=soc

11. Clean Money in a Dirty System: Relationship Networks and Land Rezoning in

     Queensland

    Murray, Cameron K. (University of Queensland)

    Frijters, Paul (University of Queensland) 

We use a unique regulatory event that occurred in Queensland, Australia, from 2007- 2012, to examine the predictive power of landowner relationship  networks and lobbying behaviour on successfully gaining value-enhancing  rezoning. A State authority, the Urban Land Development Authority (ULDA),  took planning control away from local councils in selected areas in order to  increase the speed and scale of development in those areas, in the process  increasing land values. Using micro-level relationship data from multiple  sources, we compare the relationship-network characteristics of landowners of  comparable sites inside and outside the ULDA areas, finding that 'connected' landowners owned 75% of land inside the rezoned areas, and only 12% outside,  capturing $410 million in land value gains out of the total $710 million from  rezoning. The marginal gains to all landowners of becoming connected in our  sample were $190 million. We also find that engaging a professional lobbyist  is a substitute for having one's own connections. Scaling up from our sample  of six rezoned areas to the hundreds of rezoning decisions across Queensland  and Australia in the last few decades, suggests that many billions of dollars  of economic rent are being regularly transferred from the general population  to connected land owners through political rezoning decisions.

    Keywords: networks, social capital, rezoning, corruption, lobbying

    JEL: D72 D73 R52 R58

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9028&r=soc

12. Nudges, Social Norms and Permanence in Agri-Environmental Schemes

    Kuhfuss, L.

    Preget, R.

    Thoyer, S.

    Hanley, N.

    Le Coent, P.

    Desole, M.

Agri-environmental schemes (AES), implemented to address a wide range of  environmental issues, suffer from what has been referred to as the “end of  the contract problem”, in the sense that many of the land management  practices adopted under the scheme cannot be expected to persist in the  absence of payments. A first objective of this paper is therefore to  investigate farmers’ actual land management intentions at the end of AES  contracts. The second objective is to investigate the effect of social norms,  and framing of these norms, on the likely permanence of land management  practices adopted under AES. That is, we are interested in whether a “nudge” in the form of a social norm can help solve the end of contract problem. Our  results are based on the stated intentions of 395 farmers participating in  the French AES scheme MAEt. They show that almost half of the farmers of our  sample are willing to maintain the practices adopted during the AES even in  the absence of payments after the contract ends, and that information about  what other farmers intend to do – the social norm - can greatly influence  farmers’ decisions. However, the framing of this information has no  significant effect on stated intentions.

    Keywords: Agri-environmental schemes, Permanence, Framing, Social norm,

     Agribusiness, Environmental Economics and Policy, Q18, Q28, D03,

URL: http://d.repec.org/n?u=RePEc:ags:aesc15:204233&r=soc

13. Voluntary Associations, Corporate Rights, and the State: Legal Constraints

     on the Development of American Civil Society, 1750-1900

    Ruth H. Bloch

    Naomi R. Lamoreaux

The freedom of citizens to form voluntary associations has long been viewed  as an essential ingredient of modern civil society. Our chapter revises the  standard Tocquevillian account of associational freedom in the early United  States by accentuating the role of state courts and legislatures in the  creation and regulation of nineteenth-century American nonprofit  corporations. Corporate status gave associations valuable rights that went  beyond the basic right of individuals to associate. Government officials  selectively used their power to grant and enforce corporate charters to  reward politically favored groups while denying equivalent rights to groups  they viewed as politically or socially disruptive.

    JEL: N11

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21153&r=soc

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