Social Capital Stocks, Giving Flows and Welfare Outcomes

Lorna Zischka ()
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Lorna Zischka: Department of Economics, University of Reading

No em-dp2014-04, Economics Discussion Papers from Department of Economics, University of Reading

Abstract: Giving is a quintessentially relational activity. Giving time and money to meet the needs of persons other than oneself fosters interpersonal trust, social cohesion and collaboration; relational factors that are foundational to productivity and life-satisfaction. Citizenship Survey data from the UK is used to provide empirical evidence for the link between this 'social capital' and giving, and giving and welfare outcomes. Welfare is measured in private terms (life-satisfaction and income) as well as in communal terms (trust, crime and deprivation). We find that giving levels interact with all expressions of welfare on a similar scale to big social issues like unemployment, race, education, ill-health and low incomes. People who give only when constrained to do so by social pressures have less association with positive welfare outcomes than those who give freely. We propose that giving flows link social capital stocks to welfare outcomes, and that positive welfare outcomes also incentivize time and money investments back into the relational (social) capital stock. Understanding social capital and its benefits through the prism of giving flows clarifies how one might invest in the relational stock. It also bypasses many measurement complexities by targeting the flow to and from the stock rather than the stock itself.

Pages: 40 pages
Date: 2014-07-17
New Economics Papers: this item is included in nep-hap and nep-soc
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