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Social Capital and Urban Growth

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  • Edward L. Glaeser
  • Charles Redlick

Abstract

Social capital is often place-specific while schooling is portable, so the prospect of migration may reduce the returns to social capital and increase the returns to schooling. If social capital matters for urban success, it is possible that an area can get caught in a bad equilibrium where the prospect of out-migration reduces social capital investment and a lack of social capital investment makes out-migration more appealing. We present a simple model of that process and then test its implications. We find little evidence to suggest that social capital is correlated with either area growth or rates of out-migration. We do, however, find significant differences in the returns to human capital across space, and a significant pattern of skilled people disproportionately leaving declining areas. For people in declining areas, the prospect of out-migration may increase the returns to investment in human capital, but it does not seem to impact investment in social capital.

Suggested Citation

  • Edward L. Glaeser & Charles Redlick, 2008. "Social Capital and Urban Growth," NBER Working Papers 14374, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14374
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    References listed on IDEAS

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    1. Spilimbergo, Antonio & Ubeda, Luis, 2004. "A model of multiple equilibria in geographic labor mobility," Journal of Development Economics, Elsevier, vol. 73(1), pages 107-123, February.
    2. Berry, Christopher R. & Glaeser, Edward L., 2005. "Divergence of Human Capital Levels across Cities," Working Paper Series rwp05-057, Harvard University, John F. Kennedy School of Government.
    3. Westlund, Hans & Bolton, Roger, 2003. "Local Social Capital and Entrepreneurship," Small Business Economics, Springer, vol. 21(2), pages 77-113, September.
    4. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
    5. Edward L. Glaeser & Joshua D. Gottlieb, 2008. "The Economics of Place-Making Policies," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 155-253.
    6. DiPasquale, Denise & Glaeser, Edward L., 1999. "Incentives and Social Capital: Are Homeowners Better Citizens?," Journal of Urban Economics, Elsevier, vol. 45(2), pages 354-384, March.
    7. Christopher R. Berry & Edward L. Glaeser, 2005. "The divergence of human capital levels across cities," Papers in Regional Science, Wiley Blackwell, vol. 84(3), pages 407-444, August.
    8. David Austen-Smith & Roland G. Fryer, 2005. "An Economic Analysis of "Acting White"," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 551-583.
    9. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels across Cities," Harvard Institute of Economic Research Working Papers 2091, Harvard - Institute of Economic Research.
    10. Roger Bolton, 1992. "'Place Prosperity vs People Prosperity' Revisited: An Old Issue with a New Angle," Urban Studies, Urban Studies Journal Limited, vol. 29(2), pages 185-203, April.
    11. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels Across Cities," NBER Working Papers 11617, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Eiji Yamamura, 2011. "How Do Neighbors Influence Investment in Social Capital? Homeownership and Length of Residence," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 17(4), pages 451-464, November.
    2. De Santis, Roberta & Fasano, Alessandra & Mignolli, Nadia & Villa, Anna, 2014. "Smart city: fact and fiction," MPRA Paper 54536, University Library of Munich, Germany.
    3. Eiji Yamamura, 2011. "Homeownership and investment for social capital in Japan: Dynamic Panel approach," Economics Bulletin, AccessEcon, vol. 31(3), pages 2250-2259.
    4. Alberto Alesina & Yann Algan & Pierre Cahuc & Paola Giuliano, 2015. "Family Values And The Regulation Of Labor," Journal of the European Economic Association, European Economic Association, vol. 13(4), pages 599-630, August.
    5. Soogwan Doh & Edmund J. Zolnik, 2012. "Social capital and entrepreneurship: an empirical analysis of the role of social capital in self-employment," Chapters,in: Entrepreneurship, Social Capital and Governance, chapter 7, pages 160-191 Edward Elgar Publishing.
    6. Yamamura, Eiji, 2011. "Comparison of the effects of homeownership by individuals and their neighbors on social capital formation: Evidence from Japanese General Social Surveys," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 637-644.
    7. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 983-1028, December.
    8. Soogwan Doh & Connie McNeely, 2012. "A multi-dimensional perspective on social capital and economic development: an exploratory analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 821-843, December.
    9. Mundula, Luigi & Auci, Sabrina, 2013. "Smart Cities and a Stochastic Frontier Analysis: A Comparison among European Cities," MPRA Paper 51586, University Library of Munich, Germany.
    10. Roberta De Santis & Alessandra Fasano & Nadia Mignolli & Anna Villa, 2015. "A primer on city "smartness" measurement," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2015(2), pages 34-51.

    More about this item

    JEL classification:

    • D0 - Microeconomics - - General
    • H0 - Public Economics - - General
    • I0 - Health, Education, and Welfare - - General
    • J0 - Labor and Demographic Economics - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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