Working Paper: NBER ID: w22556
Authors: Kirk Hamilton; John F. Helliwell; Michael Woolcock
Abstract: We combine theory with data from different domains to provide an empirical analysis of the scale and variability of social capital as wealth. This is used to argue, given what we have learned in the literature on social capital, that the welfare returns to investing in trust could be substantial. Using social trust data from 132 nations covered by the Gallup World Poll, we present a range of estimates of social trust’s wealth-equivalent values. The estimates of the wealth embodied in social capital are very large, and with a structure and distribution quite different from those for physical capital. These estimates reflect values above and beyond what social trust contributes to supporting incomes and health. Although social trust is an important component of total wealth in all regions and country groupings, there are nonetheless big variations within and among regions, ranging from as low as 12% of total wealth in Latin America to 28% in the OECD.
Keywords: Social Capital; Trust; Wellbeing; Wealth
JEL Codes: E21; E22; I31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social trust (Z13) | subjective wellbeing (I31) |
| social trust (Z13) | overall wealth (D31) |
| social trust (Z13) | life evaluations (H43) |
| social trust (Z13) | wellbeing outcomes (I31) |
| social trust (Z13) | positive externalities (D62) |