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on Social Norms and Social Capital |
| By: | Berggren, Niclas (The Ratio Institute); Bjørnskov, Christian (Aarhus School of Business, Aarhus University) |
| Abstract: | We look at the effect of religiosity on social trust, defined as the share of a population that thinks that people in general can be trusted. This is important since social trust is related to many desired outcomes, such as growth, education, democratic stability and subjective well-being. The effect of religiosity is theoretically unclear: while all major religions call for behaving well to others, religious groups may primarily trust people in their own groups and distrust others, as well as cause division in the broader population. We make use of new data from the Gallup World Poll for 105 countries and the U.S. states, measuring religiosity by the share of the population that answers yes to the question “Is religion an important part of your daily life?”. Our empirical results, making use of regression analysis whereby we control for other possible determinants of social trust and, by using instrumental variables, for the risk of reverse causality, indicate a robust, negative effect of religiosity, both internationally and within the US. |
| Keywords: | Trust; Religiosity; Religion; Social Capital |
| JEL: | O57 Z12 Z13 |
| Date: | 2009–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0142&r=soc |
| By: | Butler, Jeffrey V. (Einaudi Institute for Economics and Finance); Giuliano, Paola (University of California, Los Angeles); Guiso, Luigi (European University Institute) |
| Abstract: | A vast literature has investigated the relationship between trust and aggregate economic performance. We investigate the relationship between individual trust and individual economic performance. We find that individual income is hump-shaped in a measure of intensity of trust beliefs available in the European Social Survey. We show that heterogeneity of trust beliefs in the population, coupled with the tendency of individuals to extrapolate beliefs about others from their own level of trustworthiness, could generate the non-monotonic relationship between trust and income. Highly trustworthy individuals think others are like them and tend to form beliefs that are too optimistic, causing them to assume too much social risk, to be cheated more often and ultimately perform less well than those who happen to have a trustworthiness level close to the mean of the population. On the other hand, the low-trustworthiness types form beliefs that are too conservative and thereby avoid being cheated, but give up profitable opportunities too often and, consequently, underperform. Our estimates imply that the cost of either excessive or too little trust is comparable to the income lost by foregoing college. Furthermore, we find that people who trust more are cheated more often by banks as well as when purchasing goods second hand, when relying on the services of a plumber or a mechanic and when buying food. We complement the survey evidence with experimental evidence showing that own trustworthiness and expectations of others' trustworthiness in a trust game are strongly correlated and that performance in the game is hump-shaped. |
| Keywords: | economic performance, trustworthiness, trust, culture, false consensus |
| JEL: | A1 A12 D1 O15 Z1 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4416&r=soc |
| By: | Elena Fumagalli (School of Medicine, Health Policy & Practice, University of East Anglia); laura Fumagalli (Institute for social and economic research, University of Essex) |
| Abstract: | The paper studies the impact of ethnic diversity on social participation of young people. We first propose a theoretical model in which the agents choose between structured and unstructured social activities by taking into account the ethnic composition of the groups they join. We test our predictions using English census data together with the “Longitudinal Survey of Young People in England” (LSYPE) and we find that ethnic segregation increases the probability of hanging around near home, while ethnic fractionalization decreases it. Furthermore, more structured activities are not affected by ethnic fractionalization. Finally, we use an IV strategy based on both historical and geographical data to correct for endogenous sorting into neighborhoods. The results we get are even stronger than those obtained where the ethnic composition of the neighborhood is taken as exogenous. |
| Keywords: | Social participation, Fractionalization, Segregation |
| JEL: | C25 D71 J15 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2009_21&r=soc |
| By: | Andersson, Fredrik (U.S. Department of the Treasury); Burgess, Simon (University of Bristol); Lane, Julia (National Science Foundation) |
| Abstract: | Substantial immigrant segregation in the United States, combined with the increase in the share of the U.S. foreign-born population, have led to great interest in the causes and consequences of immigrant concentration, including those related to the functioning of labor markets. This paper provides robust evidence that both the size and the quality of an immigrant enclave affects the labor market outcomes of new immigrants. We develop new measures of the quality, or information value, of immigrant networks by exploiting data based on worker earnings records matched to firm and Census information. We demonstrate the importance of immigrant employment links: network members are much more likely than other immigrants to be employed in the same firm as their geographic neighbors. Immigrants living with large numbers of employed neighbors are more likely to have jobs than immigrants in areas with fewer employed neighbors. The effects are quantitatively important and robust under alternative specifications. For example, in a high value network – one with an average employment rate in the 90th percentile – a one standard deviation increase in the log of the number of contacts in the network is associated with almost a 5% increase in the employment rate. Earnings, conditional on employment, increase by about 0.7%. |
| Keywords: | social networks, immigrant enclaves, labor market intermediaries |
| JEL: | J61 J20 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4423&r=soc |
| By: | Kato, Takao (Department of Economics, Aarhus School of Business); Shu, Pian (Department of Economics, Aarhus School of Business) |
| Abstract: | Using weekly data for defect rates (proportion of defective output) for all weavers in a Chinese textile firm during a 12 months (April 2003 - March 2004) period, we provide some of the first rigorous evidence on the presence and nature of peer effects in the manufacturing workplace. First, a worker is found to put in more effort and improve her performance when she is working with more able teammates. Second, by exploiting the well-documented fact that an exogenouslyformed strong divide between urban resident workers and rural migrant workers exists in firms in Chinese cities, we provide novel evidence on the interplay between social networks (urban resident group and rural migrant group) and peer effects. Specifically, we find that a worker puts in more effort when she is working with more able outgroup teammates but not when working with more able ingroup teammates, pointing to intergroup competition as a powerful source of the peer effects. Such peer effects across the social network, combined with the presence of incentive to outperform teammates at this firm, are largely consistent with recent experimental evidence on the important role that group identities play in facilitating altruistic behaviors. |
| Keywords: | peer effects in the workplace; social networks; intergroup competition |
| JEL: | J24 |
| Date: | 2009–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2009_012&r=soc |
| By: | Zhao Chen; Ming Lu; Hiroshi Sato |
| Abstract: | An entry barrier in the labor market can be an important source of wage inequality. This paper finds that social networks, father's education and political status, and urban household registration status (hukou identity), as well as their own education, experience, age, and gender, help people enter high-wage industries. When contrasting coastal and inland samples, after instrumenting social networks by household political identity (based on classifications during the land reform in the 1950s), we find that social networks are more helpful for entering high-wage industries. The implication of this paper is: breaking industrial entry barriers in the urban labor market is an essential policy in order to control inter-industrial wage inequality in urban China. |
| Keywords: | inter-industrial wage differentials, industry monopoly, entry barrier, labor market, social networks, CHIPS data |
| JEL: | J31 J42 Z1 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd09-084&r=soc |
| By: | Ronald Jean Degen (International School of Management Paris) |
| Abstract: | This paper explains how the increasingly popular social network driven ideation works for some companies, and how this can be expanded to encompass the complete crowdsourcing innovation process (beyond simple ideation). In a contemporary context, businesses that are unable to keep up with innovations are simply overrun by those who are more efficient at this. This results in the dilemma that confronts all innovating companies in the 21st century: while innovation is critical for survival of a company, internal R&D is an inefficient approach to innovation. As a result of this dilemma, today?s innovative companies generally conduct little or no basic research on their own. They mostly innovate using the research discoveries of others. Some of these companies promote ideation forums on social networks to gain ?memes? for innovative ideas. This first step in the crowdsourcing innovation process can be expanded to include all the remaining steps of the innovation process, up to marketing and selling the product or service, as these all originate from ?crowdsourcing ideation?. |
| Keywords: | social network driven innovation, ideation forums, crowdsourcing ideation, crowdsourcing innovation process, memes, mavens, connectors, influencers, nanostories, flash mobs, job to be done |
| JEL: | M0 M1 |
| Date: | 2009–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:pil:wpaper:47&r=soc |
| By: | Migheli, Matteo |
| Abstract: | This paper studies how individual religiosity affects people's behaviour. In particular here I study the behaviour of the second players in a standard trust game. They have the possibility of sharing some resources between themselves and their game mates. It results that more religious people tend to choose an even allocation of these resources, whilst the less religious participants are either opportunistic or generous. |
| Keywords: | religiosity, distribution of resources, inequity aversion |
| JEL: | C93 D30 Z12 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:133&r=soc |
| By: | Kiridaran Kanagaretnam; Stuart Mestelman; Khalid Nainar; Mohamed Shehata |
| Abstract: | This paper uses laboratory mechanism design in an investment environment to examine the impact of empowering investors with the right to veto the investee’s profit distribution decision on the level of trust and trustworthiness. One of the key findings is that the empowerment of investors through both costless and costly vetoes significantly increases trust by over 30% in both cases. Interestingly, we observe a comparable pattern when the power to veto is removed. Analyses of veto decisions indicate that empowering investors increases both trust and trustworthiness without an undue abuse of the power to veto and that the veto decisions are largely driven by unfair responses, consistent with the theory on inequity aversion. |
| Keywords: | Empowerment; Veto; Investment; Trust; Trustworthiness; Reciprocity |
| JEL: | C70 C91 D63 D81 D82 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2009-16=&r=soc |
| By: | Ahmed Doghmi (Strategic Interaction Group, Max Planck Institute of Economics, Jena, Germany); Miloudi Kobiyh (Center for Research in Economics and Management, University of Caen, France) |
| Abstract: | In this paper, we introduce the concept of payoffi distortion in the standard prisoner's dilemma game when strategies are driven by psychological behaviors. This concept enables to take account each player's assessment of the other player's behavior and the asymmetry of information. We determine the conditions which allow that mutual cooperation constitutes the equilibrium. we particularly focus on the reciprocity in case of complete and incomplete information about the payoffi distortion. We show that mutual cooperation is a Nash equilibrium with complete information and is a Bayesian equilibrium when each player believes that his opponent behaves with "large" reciprocity in incomplete information environment. |
| Keywords: | Reciprocity, Behavior, Cooperation, prisoner's dilemma game. |
| JEL: | C7 A13 |
| Date: | 2009–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-072&r=soc |
| By: | Lacetera, Nicola (Case Western Reserve University); Macis, Mario (University of Michigan) |
| Abstract: | Experimental studies document that financial rewards discourage the performance of altruistic activities, because they destroy intrinsic altruistic motivations. We set up a randomized-controlled experiment, through a survey administered to 467 blood donors in an Italian town, and find that donors are not reluctant to receive compensation in general: A substantial share of respondents declared they would stop being donors if paid a small amount of cash, but we do not find such effects when a voucher of the same nominal value is offered instead. The aversion to direct cash payments is particularly marked among women and older respondents, while there are neither gender nor age differences in the response to the voucher. Implications for research and public policy are discussed. |
| Keywords: | incentives, altruism, public good provision, pro-social behavior, public health |
| JEL: | D12 D64 I18 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4458&r=soc |
| By: | Mayraz, Guy (CEP, London School of Economics); Wagner, Gert G. (DIW Berlin); Schupp, Jürgen (DIW Berlin) |
| Abstract: | Using a unique dataset we study both the actual and self-perceived relationship between subjective well-being and income comparisons against a wide range of potential comparison groups, enabling us to investigate a broader range of questions than in previous studies. In questions inserted into a 2008 module of the German-Socio Economic Panel Study we ask subjects to report (a) how their income compares to various groups, such a co-workers, friends, and neighbours, and (b) how important these income comparisons are to them. We find substantial gender differences, with income comparisons being much better predictors of subjective well-being in men than in women. Generic (same-gender) comparisons are the most important, followed by within profession comparisons. Once generic and within-profession comparisons are controlled for, income relative to neighbours has a negative coefficient, implying that living in a high-income neighbourhood increases happiness. The perceived importance of income comparisons is found to be uncorrelated with its actual relationship to subjective well-being, suggesting that people are unconscious of its real impact. Subjects who judge comparisons to be important are, however, significantly less happy than subjects who see income comparisons as unimportant. Finally, the marginal effect of relative income on subjective well-being does not depend on whether a subject is below or above the reference group income. |
| Keywords: | income comparisons, relative income, life satisfaction, German Socio Economic Panel Study, SOEP |
| JEL: | D31 D62 D63 I3 I31 Z13 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4390&r=soc |
| By: | Jellal, Mohamed |
| Abstract: | In this paper, we examine the pure exchange motive for intergenerational transfers within the family. We consider a model where a selfish parent offers a financial transfer in exchange for the services of the child. Using a Stackelberg game, we study the optimal attention-money contract between the generations. We prove that the amount of gift received may be either positively or negatively related with the child's income. In addition, the relationship between the two variables is non linear and affected by the parent's degree of risk aversion. This nonlinearity, which has been largely neglected to date in empirical analyses, may explain why the exchange transfer motive has received little support in developed countries. |
| Keywords: | Family;Filial Attention; Care;intergenerational Transfers; Incentives |
| JEL: | J10 J19 J12 D1 |
| Date: | 2009–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17713&r=soc |