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Impact of Social Capital on Income

Anna Grochowska and Pawel Strawinski ()

Ekonomia journal, 2012, vol. 31

Abstract: In this paper we attempt to quantify the impact of social capital on income. We follow Putnam’s [1995] approach and we construct a synthetic index for social capital using a multivariate probit model. Social capital is considered as one of the crucial individual endowments, next to physical and human capital. In a second step, we estimate the impact of the synthetically constructed social capital index on an individual’s income using a Mincer-type earnings equation. The results show that social capital explains up to 20% of income variation both at the individual and household level. However, human capital and physical capital remain the critical determinants of individual income.

Keywords: social capital; income; well-being; local community; household (search for similar items in EconPapers)
Date: 2012
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