Working Paper: NBER ID: w30313
Authors: Raj Chetty; Matthew O. Jackson; Theresa Kuchler; Johannes Stroebel; Nathaniel Hendren; Robert B. Fluegge; Sara Gong; Federico Gonzalez; Armelle Grondin; Matthew Jacob; Drew Johnston; Martin Koenen; Eduardo Lagunamuggenburg; Florian Mudekereza; Tom Rutter; Nicolaj Thor; Wilbur Townsend; Ruby Zhang; Mike Bailey; Pablo Barber; Monica Bhole; Nils Wernerfelt
Abstract: In this paper—the first in a series of two papers that use data on 21 billion friendships from Facebook to study social capital—we measure and analyze three types of social capital by ZIP code in the United States: (i) connectedness between different types of people, such as those with low vs. high socioeconomic status (SES); (ii) social cohesion, such as the extent of cliques in friendship networks; and (iii) civic engagement, such as rates of volunteering. These measures vary substantially across areas, but are not highly correlated with each other. We demonstrate the importance of distinguishing these forms of social capital by analyzing their associations with economic mobility across areas. The fraction of high-SES friends among low-SES individuals—which we term economic connectedness—is among the strongest predictors of upward income mobility identified to date, whereas other social capital measures are not strongly associated with economic mobility. If children with low-SES parents were to grow up in counties with economic connectedness comparable to that of the average child with high-SES parents, their incomes in adulthood would increase by 20% on average. Differences in economic connectedness can explain well-known relationships between upward income mobility and racial segregation, poverty rates, and inequality. To support further research and policy interventions, we publicly release privacy-protected statistics on social capital by ZIP code at www.socialcapital.org.
Keywords: social capital; economic mobility; Facebook data; socioeconomic status; upward income mobility
JEL Codes: R0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic connectedness (F60) | access to information and opportunities (I24) |
| upward income mobility (J62) | economic connectedness (F60) |
| economic connectedness (F60) | upward income mobility (J62) |
| childhood economic connectedness (J13) | adult mobility (J62) |
| economic connectedness (F60) | mobility outcomes (J62) |