Social Capital, Human Capital, and Fertility

Abstract

We develop an overlapping generations model to study how the interplay between social and human capital affects fertility. In a framework where families face a trade-off between the quantity and quality of children, we incorporate the assumption that social capital plays a key role in the accumulation of human capital. We show how the erosion of social capital can trigger a chain of reactions leading households to base their childbearing decisions on quantity, instead of quality, resulting in higher fertility.

Does social capital explain the Solow residual? A DSGE approach

“…Job placement mechanisms are further refined by the fact that, in high trust societies, hiring decisions are more likely to be influenced by talent and effort instead of the personal attributes of applicants, such as blood ties and personal knowledge -which are common surrogates of trustworthiness in low-trusting societies (Knack and Keefer, 1997;Alesina and La Ferrara, 2005;Zenou, 2015). As a result, social capital also increases the return to specialized and vocational educa-tion, resulting in stronger incentives to invest in human capital (Knack and Keefer, 1997;Guiso et al, 2010;Coppier et al, 2018).…”