nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒07‒11
nine papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Does Persistence in Start-up Activity Reflect Persistence in Social Capital? By Michael Fritsch; Michael Wyrwich
  2. One Mandarin Benefits the Whole Clan: Hometown Favoritism in an Authoritarian Regime By Quoc-Anh Do; Kieu-Trang Nguyen; Anh N. Tran
  3. Self-Managed Working Time and Employee Effort: Theory and Evidence By Michael Beckmann; Thomas Cornelissen; Matthias Kräkel
  4. Leave the Drama on the Stage: The Effect of Cultural Participation on Health By Lars Thiel
  5. Get in with a Foreigner: Consumer Trust in Domestic and Foreign Banks By Werner Bönte; Ute Filipiak; Sandro Lombardo
  6. Enforcing Repayment: Social Sanctions versus Individual Incentives By Arup Daripa
  7. The Effect of Savings Accounts on Interpersonal Financial Relationships: Evidence from a Field Experiment in Rural Kenya By Dupas, Pascaline; Keats, Anthony; Robinson, Jonathan
  8. Us and Them: Experimental evidence on what creates efficiency in choices made by married couples. By Lopez Maria Claudia; Munro Alistair; Tarazona-Gomez Marcela
  9. Family Values and the Regulation of Labor By Alberto Alesina; Yann Algan; Pierre Cahuc; null null

  1. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: Emerging literature shows that spatial differences in entrepreneurship tend to persist over longer periods of time. A potential mechanism underlying this pronounced persistence is that high levels of start-up activity lead to the emergence of a regional culture and a supporting environment in favor of entrepreneurship that particularly involves social capital. This chapter summarizes the available empirical evidence on the regional persistence of entrepreneurship and elaborates in detail how different elements of such a culture, such as social capital, can exert an influence on the level of new business formation and self-employment. As a demonstration for the relevance of a regional entrepreneurship culture for new business formation, we highlight the case of Germany where we find pronounced persistence of start-up activity despite radical structural and institutional shocks over the course of the 20th century. The German case suggests that there is a long-lasting local culture of entrepreneurship that can survive disruptive changes. We discuss the relationship between place-specific social capital and a regional culture of entrepreneurship and draw policy conclusions.
    Keywords: Entrepreneurship, social capital, economic development, self-employment, new business formation, entrepreneurship culture, institutions
    JEL: L26 R11 O11
    Date: 2015–07–07
  2. By: Quoc-Anh Do (Département d'économie); Kieu-Trang Nguyen (London School of Economics); Anh N. Tran (Indiana University Bloomington)
    Abstract: We study patronage politics in authoritarian Vietnam, using an exhaustive panel of ranking officials from 2000 to 2010 to estimate their promotions’ impact on infrastructure in their patrilineal hometowns. Favoritism is pervasive across all ranks, even among officials without budget authority. Promotions of officials strongly improve hometown infrastructure including roads, marketplaces, and irrigation. In contrast to democracies’ pork-barrel politics, elected legislators are not influential. Favoritism is likely motivated by officials’ social preferences for hometowns rather than by political considerations, because favors are narrowly targeted to small communes, and are stronger where local culture emphasizes the family bond.
    Keywords: Favoritism; Patronage; Authoritarian Regime; Political Connection; Hometown; Infrastructure
    JEL: O12 D72 H72
    Date: 2013–10
  3. By: Michael Beckmann; Thomas Cornelissen; Matthias Kräkel
    Abstract: This paper theoretically and empirically examines the impact of self-managed working time (SMWT) on employee effort. As a means of increased worker autonomy, SMWT can theoretically increase effort via intrinsic motivation and reciprocal behaviour, but can lead to a decrease of effort due to a loss of control. Based on German individual-level panel data, we find that SMWT employees exert higher effort levels than employees with fixed working hours. Even after accounting for observed and unobserved characteristics there remains a modest positive effect. This effect is mainly driven by employees who are intrinsically motivated, suggesting that intrinsic motivation is complementary to SMWT. However, reciprocal work intensification does not seem to be an important channel of providing extra effort.
    Keywords: Self-managed working time, worker autonomy, employee effort, reciprocity, intrinsic motivation, complementarity
    JEL: J24 J81 M50
    Date: 2015
  4. By: Lars Thiel
    Abstract: The aim of this study is to estimate the causal effect of cultural participation on health status. Cultural activities may directly impact upon health through palliative coping or substituting health-compromising behaviors. Cultural engagement may also facilitate the development of social networks, which can improve health via social support and the dissemination of social health norms. Previous estimates on the arts-health relationship are potentially biased due to reverse causality and unobserved heterogeneity. Using individual-level data from Germany, we employ propensity-score matching methods. The treatment group is confined to individuals that visit cultural events at least once a month. The participation equation includes a rich set of personal characteristics that cover the respondents' demographic and social background, social capital and leisure-time activities, health-related lifestyle, personality and childhood environment. We explicitly consider reverse causality by including the pre-treatment trends in health outcomes among the covariates. To deal with time-fixed unobserved heterogeneity, we combine the matching model with a difference-indifference approach. We find that frequent cultural-event visits are unrelated to health once we account for unobserved persistent differences across individuals. However, examining the dose-response relationship we find positive mental-health effects of low levels of cultural participation compared to non-attendance. Our results may thus yield important insights on the effectiveness of arts participation as a means to reduce social inequalities in health.
    Keywords: Cultural participation; mental health; physical health; propensity-score matching; multivalued treatment
    JEL: I12 Z11
    Date: 2015
  5. By: Werner Bönte (University of Wuppertal); Ute Filipiak (Georg-August-University Göttingen); Sandro Lombardo (University of Wuppertal)
    Abstract: Prior research suggests that trust plays an important role for individuals' participation in stock markets. This paper focuses on potential customers in retail banking markets and empirically investigates their trust in foreign banks and domestic banks. Using a large survey on savings patterns of Indian households, we find that potential retail banking customers in India are less likely to trust foreign banks with their money than Indian private banks. However, our results also suggest that highly educated Indians using information sources tend to have more confidence in foreign banks than in Indian private banks.
    Keywords: Trust; Banking; India
    JEL: G2 D8 Z1
    Date: 2015–07–01
  6. By: Arup Daripa (Department of Economics, Mathematics & Statistics, Birkbeck)
    Abstract: We study repayment incentives generated through social sanctions and under pure in- dividual liability. In our model agents are heterogeneous, with differing degrees of risk aversion. We consider a simple setting in which agents might strategically default from a loan program. We remove the usual assumption of exogenous social penalties, and consider the endogenous penalty of exclusion from an underlying social cooperation game, modeled here as social risk-sharing. For some types of agents social risk-sharing can be sustained by the threat of exclusion from this arrangement. These types have social capital and can be given a loan that bootstraps on the risk-sharing game by using the threat of exclusion from social risk-sharing to deter strategic default. We show that the use of such sanctions can only cover a fraction of types participating in social risk sharing. Further, coverage is decreasing in loan duration. We then show that an individual loan programaugmented by a compulsory illiquid savings plan (such schemes are used by the Grameen Bank) can deliver greater coverage, and can even cover types excluded from social risk-sharing (i.e. types for whom social penalties are not available at all). Further, the coverage of an individual loan program has the desirable property of increasing with loan size as well as loan duration. Finally, we show that social cooperation enhances the performance of individual loans. Thus fostering social cooperation is beneficial under individual liability loans even though it has limited usefulness as a penalty under social enforcement of repayment. The results offer an explanation for the Grameen Bank’s adoption of individual liability replacing group liability in its loan programs since 2002.
    Keywords: Strategic default, social cooperation, social penalties, individual liability, loan coverage, loan duration, loan size.
    JEL: O12
    Date: 2015–03
  7. By: Dupas, Pascaline; Keats, Anthony; Robinson, Jonathan
    Abstract: The welfare impact of expanding access to bank accounts depends on whether accounts crowd out pre-existing financial relationships, or whether private gains from accounts are shared within social networks. To study the effect of accounts on financial linkages, we provided free bank accounts to a random subset of 885 households. Within households, we randomized which spouse was offered an account and find no evidence of negative spillovers to spouses. Across households, we document positive spillovers: treatment households become less reliant on grown children and siblings living outside their village, and become more supportive of neighbors and friends within their village.
    Keywords: financial access; social insurance; spillovers
    JEL: C93 D14 G21 O16
    Date: 2015–07
  8. By: Lopez Maria Claudia (Department of Community Sustainability, Michigan State University, MI USA); Munro Alistair (GRIPS); Tarazona-Gomez Marcela (Oxford Policy Management, United Kingdom)
    Abstract: A recurring and puzzling pattern with experiments on intra-household behaviour is the common failure of couples to attain the cooperative solution. Using married couples from a low income area of Bogota, Colombia we conduct an experiment that raises the salience of the family vis-à-vis outsiders. In this experiment husbands and wives play a repeated voluntary contribution game. At the same time each participant plays an identical game with one stranger in the same session. When investments to the common pools are made from separate and non-fungible budgets, most subjects contribute more to the household pool than the stranger pool, but rarely contribute everything to the household even after repetition and opportunities for learning. Efficiency is not obtained. However, when subjects make contributions to the two games from a single budget many individuals converge rapidly on a strategy of investing everything in the household pool and contributing little to the pool with a stranger. Overall the amount invested in some pool rises. Our results are in line with games played with individuals in which in-group cooperation is higher when membership of the group is more salient. They suggest that strengthening family identity may raise intrahousehold cooperation, but at the expense of cooperation of interhousehold cooperation.
    Date: 2015–07
  9. By: Alberto Alesina (2441/4ia9erre4r9nva2eh5b5sac29o); Yann Algan (Département d'économie); Pierre Cahuc (Department of Economics); null null (Anderson School of Management - Global Economics and Management)
    Abstract: To be efficient, flexible labor markets require geographically mobile workers. Otherwise firms can take advantage of workers' immobility and extract rents at their expense. In cultures with strong family ties, moving away from home is costly. Thus, to limit the rents of firms and to avoid moving, individuals with strong family ties rationally choose regulated labor markets, even though regulation generates higher unemployment and lower incomes. Empirically, we find that individuals who inherit stronger family ties are less mobile, have lower wages and higher unemployment, and support more stringent labor market regulations. We find a positive association between labor market rigidities at the beginning of the 21st century and family values prevailing before World War II, and between family structures in the Middle Ages and current desire for labor market regulation. Both results suggest that labor market regulations have deep cultural roots.
    Keywords: Regulation of labor; Family values; Labor market; Market regulation
    JEL: J2 K2 Z0
    Date: 2015–04

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