Does social capital affect investment in human capital? Family ties and schooling decisions

Salvatore Di Falco and Erwin Bulte

Applied Economics, 2015, vol. 47, issue 2, 195-205

Abstract: We analyse whether traditional sharing norms within kinship networks affect education decisions of poor black households in KwaZulu-Natal. Theory predicts that the size of the kinship network ambiguously impacts on the incentive to invest in human capital (due to opposing 'empathy' and 'free-rider' effects). Our empirical analysis, based on a range of different estimators, suggests the latter effect dominates: forced solidarity within the network discourages investments in human capital.

Date: 2015
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DOI: 10.1080/00036846.2014.967383

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