Working Paper: NBER ID: w14374
Authors: 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.
Keywords: social capital; urban growth; outmigration; human capital
JEL Codes: D0; H0; I0; J0; R0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| expectation of outmigration (F22) | investment in social capital (H54) |
| investment in social capital (H54) | attractiveness of areas (R23) |
| attractiveness of areas (R23) | outmigration (F22) |
| low social capital (Z13) | urban decline (R11) |
| human capital investment (J24) | geographic mobility (J61) |
| outmigration (F22) | returns on human capital investment (J24) |
| policies reducing outmigration (J68) | social capital investment (E22) |
| social capital (Z13) | urban growth (R11) |
| social capital (Z13) | urban decline (R11) |