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Social Capital, Well-Being, and Earnings: Theory and Evidence from Poland

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  • Growiec, Jakub
  • Growiec, Katarzyna

Abstract

We study the relationship between two distinct dimensions of social capital (bridging and bonding social capital) and the personal performances of individuals: their reported subjective well-being (SWB) and earnings. A theoretical model is put forward which explains the sources and dynamics of social capital formation. It predicts an inverse U-shaped relationship between any type of social capital and SWB, an inverse U-shaped relationship between bridging social capital and earnings, and an unambiguously negative impact of bonding social capital on earnings. The key predictions of the model are confirmed using cross-section survey data from the 2005 wave of the “Social Diagnosis” survey program conducted in Poland. Very low levels of bridging social capital observed in Poland imply that it is unambiguously beneficial to invest in it: both SWB of individuals and their earnings would increase in such case.

Suggested Citation

  • Growiec, Jakub & Growiec, Katarzyna, 2007. "Social Capital, Well-Being, and Earnings: Theory and Evidence from Poland," MPRA Paper 7071, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:7071
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    File URL: https://mpra.ub.uni-muenchen.de/7071/1/MPRA_paper_7071.pdf
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    References listed on IDEAS

    as
    1. Sjoerd Beugelsdijk & Sjak Smulders, 2003. "Bridging and Bonding Social Capital: which type is good for economic growth?," ERSA conference papers ersa03p517, European Regional Science Association.
    2. Durlauf, Steven N. & Fafchamps, Marcel, 2005. "Social Capital," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 26, pages 1639-1699 Elsevier.
    3. Paul F. Whiteley, 2000. "Economic Growth and Social Capital," Political Studies, Political Studies Association, vol. 48(3), pages 443-466, June.
    4. Helliwell, John F., 2003. "How's life? Combining individual and national variables to explain subjective well-being," Economic Modelling, Elsevier, vol. 20(2), pages 331-360, March.
    5. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003. "Fifty Years of Mincer Earnings Regressions," NBER Working Papers 9732, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Growiec, Katarzyna & Growiec, Jakub, 2010. "Trusting Only Whom You Know, Knowing Only Whom You Trust: The Joint Impact of Social Capital and Trust on Individuals' Economic Performance and Well-Being in CEE Countries," MPRA Paper 23350, University Library of Munich, Germany.
    2. Katarzyna Growiec & Jakub Growiec, 2016. "Bridging Social Capital and Individual Earnings: Evidence for an Inverted U," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(2), pages 601-631, June.
    3. Katarzyna Growiec & Jakub Growiec & Bogumil Kaminski, 2017. "Social Network Structure and The Trade-Off Between Social Utility and Economic Performance," Working Papers 2017-026, Warsaw School of Economics, Collegium of Economic Analysis.
    4. Katarzyna Growiec & Jakub Growiec, 2011. "Trusting only whom you know, knowing only whom you trust: the joint impact of social capital and trust on individuals’ economic performance and happiness in CEE countries," NBP Working Papers 94, Narodowy Bank Polski, Economic Research Department.
    5. Katarzyna Growiec & Jakub Growiec, 2014. "Trusting Only Whom You Know, Knowing Only Whom You Trust: The Joint Impact of Social Capital and Trust on Happiness in CEE Countries," Journal of Happiness Studies, Springer, vol. 15(5), pages 1015-1040, October.
    6. Sztaudynger Jan Jacek, 2014. "Family And Economic Growth In Poland," Folia Oeconomica Stetinensia, De Gruyter Open, vol. 14(2), pages 53-75, December.
    7. YODO Masato & YANO Makoto, 2017. "Household Income and the OECD's Four Types of Social Capital," Discussion papers 17119, Research Institute of Economy, Trade and Industry (RIETI).
    8. Heijke J.A.M. & Ioakimidis M., 2013. "A cross-country analysis of the relationship between income inequality and social capital," ROA Technical Report 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    9. Growiec, Katarzyna & Growiec, Jakub, 2014. "Social Capital, Trust, And Multiple Equilibria In Economic Performance," Macroeconomic Dynamics, Cambridge University Press, vol. 18(02), pages 282-315, March.
    10. Urszula Markowska-Przybyla & David Ramsey, 2014. "A game theoretical study of generalized trust and reciprocation in Poland: I. Theory and experimental design," Operations Research and Decisions, Wroclaw University of Technology, Institute of Organization and Management, vol. 3, pages 59-76.

    More about this item

    Keywords

    bridging social capital; bonding social capital; earnings; subjective well-being; Poland;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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