An Economic Approach To Social Capital

In An Economic Approach to Social Capital, Edward Glaeser criticizes conventional ways of viewing social capital, studying it instead under a more economically driven lens. By developing models in which social capital is economically analyzed, Glaeser determines that the necessary definition of social capital, for his purposes, is to classify it as belonging to an individual, rather than its community. Through this concept of individual social capital, it becomes easier to understand how it is rising among various people in some places, while not in others, and thus identify and link the benefits it may have. From the outset of the article, one of Glaser’s main goals is to first familiarize the reader with what social capital will mean in …show more content…
Due to the economically driven lens in which Glaeser examines social capital, he can “predict that social capital rises and then declines with age” (p. F439) This means that a person’s social capital will peak in their midlife and then begin to drop so that even its diminution cannot be offset by increased investment. While most people invest in more social capital depending on their mobility or social status, age effects everyone. People tend to lose social capital after a mid-life peak because the amount of social organizations they participate in begins dropping off as they get older. This trend even takes things such as education into account, which only serves to mitigate the effects age has on declining social capital. (p. …show more content…
Glaeser begins by noting what advantages are already proven to arise in societies with high social capital. Judiciary systems operate more smoothly, government corruption is significantly less, and a shared mutual trust between members of the community are all trends of areas with high social capital (LaPorta et. al, 1997, as cited in Glaeser, 2002). Since Glaeser views it more as an individual factor however, his interpretations of its benefits are much more down to how it helps singular persons. For instance, he asserts, the higher someone’s individual social factor is, the more return in wages they’ll see and the better employment offers they’ll receive. High social capital does not just help with connections in the workplace, it also has non-market returns. According to Glaeser’s models, there is a direct correlation between high social capital and “the quality of the individual’s relationships, improvements in his health, or even direct happiness.” (F440) These attributes, although applied to individuals, come together to create a stronger whole. When a large number of people experience high social capital, the improvements to their everyday lives are extraordinary. This further highlights the tremendous effects social capital has on a society when it is present and makes it even more concerning that it is