In this issue we feature 7 current papers on the theme of social capital, chosen by Fabio Sabatini (Università degli Studi di Roma “La Sapienza”):

1. The societal costs of inflation and unemployment By Popova, Olga; See, Sarah Grace; Nikolova, Milena; Otrachshenko, Vladimir
2. Divided we fall? The effect of manufacturing decline on the social capital of US communities By Diemer, Andreas
3. Social Ties at Work and Effort Choice: Experimental Evidence from Tanzania By Martin Chegere; Paolo Falco; Andreas Menzel
4. Modeling social norms: an integration of the norm-utility approach with beliefs dynamics By Gavrilets, Sergey; Tverskoi, Denis; Sánchez, Angel
5. Immigration Restriction and The Transfer of Cultural Norms Over Time and Boundaries:The Case of Religiosity By Fausto Galli; Simone Manzavino; Giuseppe Russo
6. Effects of Institutional Setting on Value Estimates of Stated Preference Surveys in Developing Economies: A Discrete Choice Experiment on Conserving Biodiversity in The Cape Floristic Region By Manhique, Henrique; Wätzold, Frank
7. Measuring income inequality in social networks By Stark, Oded; Bielawski, Jakub; Falniowski, Fryderyk

1. The societal costs of inflation and unemployment

   By:	Popova, Olga; See, Sarah Grace; Nikolova, Milena; Otrachshenko, Vladimir
   Abstract:	What are the broad societal implications of inflation and unemployment? Analyzing a dataset of over 1.9 million individuals from 156 countries via the Gallup World Poll spanning 2005 to 2021, alongside macroeconomic data at the national level, we find that both inflation and unemployment have a negative link with confidence in financial institutions. While inflation is generally unassociated with confidence in government and leadership approval, unemployment still has a strong negative association with these outcomes. While we find no gender differences in the consequences of inflation and unemployment for confidence in political and financial institutions, the associations we document are more substantial for the cohorts that are likely to bear a disproportionate burden from inflation and unemployment-the middle-aged, lower-educated, and unmarried individuals, and for those living in rural areas. Uncertainty about the country's economic performance and one's own economic situation are the primary channels behind the associations we identify. These findings hold significant implications for policymakers, Central Banks, and public discourse, necessitating targeted strategies to alleviate the social consequences of inflation and unemployment.
   Keywords:	inflation, unemployment, trust, confidence in institutions, Gallup World Poll
   JEL:	D12 D83 E31 E58
   Date:	2023
   URL:	http://d.repec.org/n?u=RePEc:zbw:glodps:1341&r=soc

2. Divided we fall? The effect of manufacturing decline on the social capital of US communities

   By:	Diemer, Andreas
   Abstract:	What happens to local communities when manufacturing disappears? I examine changes in associational density over nearly two decades as a proxy for social capital in US labor markets. Exploiting plausibly exogenous trade‐induced shocks to local manufacturing activity, I test whether deindustrialization is associated with greater or lower organizational membership. I uncover a robust negative relationship between the two variables, particularly acute in rural and mostly‐White areas. My findings, however, are sensitive to measurement: There are no clearly discernible effects of deindustrialization on social capital when I consider alternative proxies for the outcome. To reconcile these results, I present evidence suggesting that economic adversity may induce a qualitative, rather than quantitative, change in social capital.
   Keywords:	deindustrialization; regional labor markets; social capital
   JEL:	R14 J01
   Date:	2023–09–01
   URL:	http://d.repec.org/n?u=RePEc:ehl:lserod:120355&r=soc

3. Social Ties at Work and Effort Choice: Experimental Evidence from Tanzania

   By:	Martin Chegere; Paolo Falco; Andreas Menzel
   Abstract:	Many firms hire workers via social networks. Whether workers who are socially connected to their employers exert more effort on the job is an unsettled debate. We address this question through a novel experiment with small-business owners in Tanzania. Participants are paired with a worker who conducts a real-effort task, and receive a payoff that depends on the worker’s effort. Some business owners are randomly paired with workers they are socially connected with, while others are paired with strangers. With a design that is sufficiently powered to detect economically meaningful effects, we find that being socially connected to one’s employer does not affect workers’ effort.
   Keywords:	firms, hiring, productivity, social ties, kinship networks
   JEL:	O17 M51 L2
   Date:	2023–09
   URL:	http://d.repec.org/n?u=RePEc:cer:papers:wp763&r=soc

4. Modeling social norms: an integration of the norm-utility approach with beliefs dynamics

   By:	Gavrilets, Sergey; Tverskoi, Denis; Sánchez, Angel
   Abstract:	We review theoretical approaches for modeling the origin, persistence and change of social norms. The most comprehensive models describe the coevolution of behaviors, personal, descriptive, and injunctive norms while considering influences of various authorities and accounting for cognitive processes and between-individual differences. Models show that social norms can improve individual and group well-being. Under some conditions though deleterious norms can persist in the population through conformity, preference falsification, and pluralistic ignorance. Polarization in behavior and beliefs can be maintained, even when societal advantages of particular behaviors or belief systems over alternatives are clear. Attempts to change social norms can backfire through cognitive processes including cognitive dissonance and psychological reactance. Under some conditions social norms can change rapidly via tipping point dynamics. Norms can be highly susceptible to manipulation, and network structure influences their propagation. Future models should incorporate network structure more thoroughly, explicitly study online norms, consider cultural variations, and be applied to real-world processes.
   Date:	2023–10–19
   URL:	http://d.repec.org/n?u=RePEc:osf:socarx:n934a&r=soc

5. Immigration Restriction and The Transfer of Cultural Norms Over Time and Boundaries:The Case of Religiosity

   By:	Fausto Galli (University of Salerno); Simone Manzavino (University of Salerno); Giuseppe Russo (University of Salerno, CSEF, and GLO)
   Abstract:	We study the effect of an immigration ban on the self-selection of immigrants along cultural traits, and the transmission of these traits to the second generation. We show theoretically that restricting immigration incentivizes to settle abroad individuals with higher attachment to their origin culture, who, under free mobility, would rather choose circular migration. Once abroad, these individuals tend to convey their cultural traits to their children. As a consequence, restrictive immigration policies can foster the diffusion of cultural traits across boundaries and generations. We focus on religiosity, which is one of the most persistent and distinctive cultural traits, and exploit the 1973 immigration ban in West Germany (Anwerbestopp) as a natural experiment. Through a diff-in-diff analysis, we find that second generations born to parents treated by the Anwerbestopp show higher religiosity.
   Keywords:	second-generation immigrants, religiosity, immigration policy, cultural transmission.
   JEL:	D91 F22 J15 K37 Z13
   Date:	2023–09–29
   URL:	http://d.repec.org/n?u=RePEc:sef:csefwp:683&r=soc

6. Effects of Institutional Setting on Value Estimates of Stated Preference Surveys in Developing Economies: A Discrete Choice Experiment on Conserving Biodiversity in The Cape Floristic Region

   By:	Manhique, Henrique; Wätzold, Frank
   Abstract:	The use of stated preference surveys for the valuation of environmental goods in developing countries has to take into account that there is substantial public distrust towards the institutions providing the environmental goods under valuation. Thus, high protest responses and low value estimates may indicate rejection or protest against the institutional setting of the survey design, rather than the dislike or low welfare effects of these goods. In this context, we investigate the effects of institutional trust on value estimates by examining the performance of three different institutions – government, conservation NGO, and farmers – in a case study aimed at eliciting preferences for conserving different types of biodiversity within orchards in the Cape Floristic Region – a biodiversity hotspot in South Africa threatened by the expansion and intensification of agriculture. We find that institutional trust has an effect on preferences and willingness-to-pay, with farmers leading to the highest level of trust and value estimates, followed rather closely by a conservation NGO and, with some distance, by the government with the lowest trust level and value estimates. In terms of preferences for biodiversity conservation, our results show that respondents prefer measures to conserve endangered and endemic species over measures primarily aimed at providing the ecosystem services of pollination and pest control.
   Keywords:	Biodiversity Hotspot; Institutional distrust; Ecosystem services; Economics; Endangered species; Payment vehicle; Western Cape
   JEL:	C5 C9 Q1 Q2 Q51 Q57
   Date:	2023–09–30
   URL:	http://d.repec.org/n?u=RePEc:pra:mprapa:118750&r=soc

7. Measuring income inequality in social networks

   By:	Stark, Oded; Bielawski, Jakub; Falniowski, Fryderyk
   Abstract:	We present a new index for measuring income inequality in networks. The index is based on income comparisons made by the members of a network who are linked with each other by direct social connections. To model the comparisons, we compose a measure of relative deprivation for networks. We base our new index on this measure. The index takes the form of a ratio: the network’s aggregate level of relative deprivation divided by the aggregate level of the relative deprivation of a hypothetical network in which one member of the network receives all the income, and it is with this member that the other members of the network compare their incomes. We discuss the merits of this representation. We inquire how changes in the composition of a network affect the index. In addition, we show how the index accommodates specific network characteristics.
   Keywords:	Food Security and Poverty, Research Methods/ Statistical Methods
   Date:	2023–10–31
   URL:	http://d.repec.org/n?u=RePEc:ags:ubzefd:338791&r=soc

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