Social Capital in the Creation of Human Capital Author(s): James S.

Coleman Reviewed work(s): Source: American Journal of Sociology, Vol. 94, Supplement: Organizations and Institutions: Sociological and Economic Approaches to the Analysis of Social Structure (1988), pp. S95-S120 Published by: The University of Chicago Press Stable URL: http://www.jstor.org/stable/2780243 . Accessed: 26/12/2011 20:45
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Social Capital in the Creation of Human Capital'

JamesS. Coleman University of Chicago

In thispaper, the conceptof social capital is introduced and illustrated, its formsare described, the social structural conditions underwhichit arises are examined,and it is used in an analysisol dropoutsfromhigh school. Use of the conceptof social capital is partof a generaltheoretical strategy discussedin the paper: taking rationalactionas a starting pointbut rejecting theextreme individualisticpremises thatoften accompanyit. The conception of social capital as a resourcefor action is one way of introducing social structure into the rational action paradigm. Three formsof social capitalare examined:obligations and expectations, information channels,and social norms.The roleof closurein the social structurein facilitating thefirst and third oftheseforms ofsocial capital is described.An analysisof the effect of the lack of social capital out of schoolbeavailable to highschool sophomores on dropping the foregraduation is carriedout. The effect ofsocial capitalwithin is examined. family and in the community outsidethe family There are two broad intellectual in thedescription and explanastreams tionof social action. One, characteristic oftheworkof mostsociologists, sees theactoras socializedand actionas governed bysocial norms, rules, lie in its and obligations. The principalvirtues stream ofthisintellectual and to explaintheway actionis to describeactionin social context ability and redirected shaped, constrained, by the social context. The otherintellectual stream, characteristic oftheworkofmosteconoarrivedat, as acting mists,sees the actoras havinggoals independently independently, and as whollyself-interested. Its principalvirtuelies in of action,thatof maximizing This principle of havinga principle utility. witha singleempirical action,together generalization (declining marginal has generated the extensive of neoclassicaleconomictheutility) growth
1 I thank criticisms of Winship for SusanShapiro, and Christopher MarkGranovetter, to inrevision. be sent Requests for reprints should aidedgreatly an earlier draft, which Illinois ofChicago, ofSociology, University Chicago, Department James S. Coleman, 60637.

0002-9602/89/9407-0010$1.50

? 1988by The University ofChicago.All rights reserved.

AJS Volume 94 Supplement S95-S120

S95

AmericanJournalof Sociology of several varieties: ory, as well as the growthof politicalphilosophy and naturalrights.2 utilitarianism, contractarianism, In earlierworks(Coleman 1986a, 1986b),I have argued forand enin sociologythat of a theoretical orientation gaged in the development fromboththeseintellectual streams.It acceptsthe includescomponents of rationalor purposiveactionand attempts to show how that principle in conjunction principle, withparticular social contexts, can accountnot contexts but also forthe onlyforthe actionsof individualsin particular of social organization. In the presentpaper, I introduce a development social capital. As conceptualtool for use in this theoretical enterprise: forintroducing this concept,it is usefulto see some of the background to modify streams. criticisms of and attempts the two intellectual CRITICISMS AND REVISIONS Both these intellectualstreamshave serious defects.The sociological theactor streamhas what may be a fatalflawas a theoretical enterprise: but has no "engineof action." The actoris shaped by the environment, thereare no internalspringsof action that give the actor a purposeor oftheenviThe veryconception ofactionas whollya product direction. ronmenthas led sociologiststhemselvesto criticizethis intellectual of stream,as in Dennis Wrong's(1961) "The OversocializedConception Man in Modern Sociology." The economicstream,on the otherhand, fliesin theface of empirical constrained reality: persons'actionsare shaped, redirected, by the social and social organizasocial networks, context; norms, interpersonal trust, in thefunctioning notonlyofthesociety butalso ofthe tionare important economy. A number of authors from both traditionshave recognizedthese difficulties and have attempted to impart someoftheinsights and orientations of the one intellectual streamto the other.In economics,Yoram Ben-Porath(1980) has developed ideas concerning the functioning of what he calls the "F-connection" in exchangesystems. The F-connection is families, friends, and firms, and Ben-Porath, drawingon literature in and sociologyas well as economics,shows the way these anthropology forms ofsocial organization affect economic exchange.OliverWilliamson has, in a numberof publications (e.g., 1975, 1981), examinedthe conditionsunderwhicheconomicactivity is organized in different institutional thatis, within forms, firms or in markets. Thereis a wholebodyofwork in economics,the "new institutional economics," thatattempts to show,
2 For a

oftheimportance oftheempirical discussion generalization to economics, see Black, Coats, and Goodwin(1973).

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Social Capital withinneoclassical economictheory,both the conditionsunder which oftheseinstitutions arise and the effects particular economicinstitutions of the system. (i.e., of social organization) on the functioning by sociologists to examinethe way There have been recentattempts of economicactivity.Baker social organizationaffects the functioning (1983) has shown how, even in the highlyrationalizedmarketof the Chicago Options Exchange, relationsamong floortradersdevelop, are theirtrades.More generally, Granovetter (1985) maintained, and affect has engagedin a broad attack on the "undersocialized conceptof man" thatcharacterizes economists' analysisofeconomicactivity. Granovetter economicsas crudelyfuncfirst criticizes much of the new institutional tionalistbecause the existenceof an economicinstitution is oftenexHe it performs fortheeconomicsystem. plainedmerely by thefunctions to economics, thereis a failure arguesthat,even in the new institutional of personalrelations and networks recognize the importance of concrete trust, in estabrelations-what he calls "embeddedness"-in generating and enforcing norms. lishingexpectations, and in creating Granovetter's idea of embeddednessmay be seen as an attemptto and social organization introduce into the analysisof economicsystems intoplace to fulfill not merely as a structure thatsprings social relations and continuity that an economicfunction, but as a structure withhistory of economicsystems. give it an independent effect on the functioning a All thiswork,bothby economists has constituted and bysociologists, Broadly,it of economicsystems. revisionist analysis of the functioning of rationalactionbut to superimcan be said to maintainthe conception organization-eitherendogenously pose on it social and institutional ofsomeofthenew instituexplanations generated, as in thefunctionalist tional economists,or as exogenousfactors,as in the more proximateworkof some sociologists. causallyoriented theeconomists' It is to import principle My aim is somewhatdifferent. includof rationalactionforuse in the analysisof social systems proper, to economicsystems, and to do so without discarding ingbut notlimited in theprocess.The concept social organization ofsocial capitalis a toolto aid in this.In thispaper, I introduce theconceptin somegenerality, and in a particular thenexamineits usefulness thatof education. context, SOCIAL CAPITAL traditions cannotbe brought Elementsforthesetwo intellectual together framein a pastiche.It is necessary to beginwitha conceptually coherent one and introduce elements from theother without workfrom destroying thatcoherence. I see two major deficiencies in earlierworkthatintroduced "exchange S97

AmericanJournalof Sociology character of thiswork. into sociology, theory" despitethe pathbreaking One was thelimitation to microsocial whichabandonstheprinrelations, to makethemicro-macro tranitsability cipal virtueofeconomictheory, to system. This was evidentbothin Homans's sitionfrompair relations (1961) work and in Blau's (1964) work. The otherwas the attempt to in an ad hoc fashion,such as "distributive introduce principles justice" (Homans 1964,p. 241) or the"normofreciprocity" (Gouldner1960).The limitsthe theory's former and the lattercreatesa deficiency usefulness, pastiche. If we begin with a theory of rationalaction,in whicheach actorhas in certain resourcesand controlover certain resourcesand interests a particular availevents,thensocial capital constitutes kindof resource able to an actor. It is not a singleentity Social capital is defined but a by its function. in common: variety ofdifferent entities, withtwo elements all consist they of some aspect of social structures, and theyfacilitate certainactionsof Like actors-whetherpersonsor corporate actors-within thestructure. of capital, social capital is productive, otherforms makingpossiblethe of certainends that in its absence would not be possible. achievement Like physicalcapital and human capital, social capital is not completely but may be specific to certainactivities. A givenform of social fungible capital that is valuable in facilitating certainactionsmay be useless or even harmful forothers. of capital, social capital inheres in the structure Unlikeotherforms of relations betweenactorsand amongactors.It is notlodgedeither in the actorsthemselves or in physicalimplements of production. Because purcan be actors ("corporateactors")just as persons posive organizations can, relationsamong corporateactors can constitute social capital for themas well (withperhapsthe best-known examplebeingthe sharing of information that allows price-fixing in an industry). However, in the present paper, theexamplesand area ofapplication to whichI willdirect attention concernsocial capital as a resource forpersons. BeforeI statemoreprecisely what social capital consists of,it is useful to give severalexamplesthatillustrate some of its different forms. 1. Wholesalediamondmarkets exhibit a property thatto an outsider is remarkable.In the processof negotiating a sale, a merchant will hand over to anothermerchant a bag of stonesforthe latterto examinein privateat his leisure,with no formalinsurancethat the latterwill not substitute one or moreinferior stonesor a paste replica.The merchandise or hundreds ofthousands, ofdollars.Such free maybe worththousands, is important to the functioning of this exchangeof stonesforinspection market.In its absence, the marketwould operatein a muchmorecumfashion. bersome,muchless efficient S98

Social Capital A given Inspectionshows certainattributes of the social structure. of merchant community is ordinarily veryclose, both in the frequency interaction and in ethnicand family ties. The wholesalediamondmarket in New York City,forexample,is Jewish, witha highdegreeofintermarriage,livingin the same community in Brooklyn, and goingto the same It is essentially synagogues. a closed community. ofthewholesalediamondmarket Observation thattheseclose indicates ties, through family,community, and religiousaffiliation, providethe insurance thatis necessary to facilitate thetransactions in themarket. If ofthiscommunity anymember defected through substituting other stones or throughstealingstones in his temporary possession,he would lose family, religious, and community ties. The strength of theseties makes in which trustworthiness possibletransactions is taken forgrantedand trade can occur with ease. In the absence of these ties, elaborateand expensive bondingand insurance deviceswould be necessary-or else the transactions could not take place. 2. The International Herald Tribuneof June21-22, 1986, contained an article on page 1 about South Korean studentradical activists.It describesthe development is passed of such activism:"Radical thought on in clandestine 'studycircles,'groupsof students who may come from the same high school or hometownor church.These studycircles. . . serveas the basic organizational unitfordemonstrations and otherprotests.To avoid detection, of different members groupsnevermeet,but communicate an appointedrepresentative." through This description of the basis of organization of thisactivism illustrates social capital of two kinds. The "same high school or hometownor church"providessocial relationson which the "studycircles"are later built.The studycirclesthemselves constitute a form of social capital-a cellularform oforganization thatappearsespecially valuable forfacilitating oppositionin any politicalsystem intolerant of dissent.Even where is tolerated, theactivipoliticaldissent certainactivities are not,whether tiesare politically motivated terrorism or simplecrime.The organization thatmakes possibletheseactivities of social is an especiallypotentform capital. 3. A motherof six children,who recently moved with husband and children from suburbanDetroitto Jerusalem, described as one reasonfor doing so the greater freedom her youngchildren had in Jerusalem. She feltsafe in letting her eightyear old take the six yearold acrosstownto schoolon the citybus and feltherchildren to be safein playingwithout in a citypark, neither of whichshe feltable to do whereshe supervision lived before. The reasonforthisdifference in social can be described as a difference capital available in Jerusalem and suburbanDetroit.In Jerusalem, the S99

American Journalof Sociology ensures that unattendedchildrenwill be "looked normativestructure exists whileno such normative structure after"by adults in the vicinity, in mostmetropolitan areas oftheUnitedStates.One can say thatfamilies social capital thatdoes not existin have available to themin Jerusalem the States. metropolitan areas of United 4. In the Kahn El Khalili marketof Cairo, the boundariesbetween merchants are difficult foran outsider to discover.The ownerof a shop thatspecializesin leatherwill, whenqueriedabout whereone can finda certain kindofjewelry,turnout to sell thatas well-or, whatappearsto to have a close associatewho sellsit, to whom be nearlythe same thing, become a take the customer.Or he will instantly he will immediately to he is nota money changer, merely byturning money changer, although a his colleaguea few shops down. For some activities, such as bringing to a friend's forothers,such as customer store,thereare commissions; are thecreation of obligations. Familyrelations moneychanging, merely in the market, of proprietorship. The whole important as is the stability is so infused withrelations ofthesortI have described thatit can market store.Alternabe seen as an organization, no less so than a department of a set of individualmertively,one can see the marketas consisting bodyofsocial capitalon whichto draw, chants,each havingan extensive through the relationships of the market. The examplesabove have shownthevalue of social capitalfora number of outcomes,botheconomicand noneconomic. There are, however, certainproperties of social capital thatare important forunderstanding ofhuman in thecreation how it comesintobeingand how it is employed capital. First,a comparison withhuman capital, and thenan examinaforseeingthese. tionof different forms of social capital, will be helpful HUMAN CAPITAL AND SOCIAL CAPITAL in the ecoand mostoriginaldevelopment Probablythe mostimportant nomicsofeducationin thepast 30 yearshas beentheidea thattheconcept of physicalcapital as embodiedin tools,machines,and otherproductive can be extended to includehumancapitalas well (see Schultz equipment 1961; Becker 1964). Just as physicalcapital is created by changes in materials to form toolsthatfacilitate humancapitalis created production, by changesin personsthatbringabout skillsand capabilitiesthatmake themable to act in new ways. Social capital, however,comesabout through changesin the relations thatfacilitate action.If physical tangible, capitalis wholly amongpersons being embodiedin observablematerialform,and humancapital is less tangible,being embodied in the skills and knowledgeacquired by an individual,social capital is less tangibleyet,forit existsin the relations SLOO

Social Capital amongpersons.Justas physicalcapitaland humancapitalfacilitate productiveactivity, social capital does as well. For example,a groupwithin which thereis extensivetrustworthiness and extensivetrustis able to thattrustworaccomplishmuchmorethan a comparablegroupwithout thinessand trust. FORMS OF SOCIAL CAPITAL in the fact that it The value of the concept of social capital lies first identifies certainaspectsof social structure by their functions, just as the concept"chair" identifies certainphysicalobjects by theirfunction, dein form,appearance, and construction. spite differences The function identified bytheconceptof"social capital"is thevalue oftheseaspectsof to actorsas resources social structure thattheycan use to achieve their interests. By identifying this function of certainaspects of social structure, the conceptofsocial capitalconstitutes bothan aid in accounting fordifferent outcomesat thelevel of individualactorsand an aid towardmakingthe micro-to-macro transitions withoutelaborating the social structural detheclantails through whichthisoccurs. For example,in characterizing destinestudy circles of South Korean radical studentsas constituting social capital thatthesestudents can use in their revolutionary activities, we assertthatthe groupsconstitute a resource thataids in movingfrom individualprotest to organizedrevolt.If, in a theory ofrevolt, a resource thataccomplishes thistaskis heldto be necessary, circles thenthesestudy are groupedtogether with those organizational structures, having very different thathave fulfilled thesame function forindividuals with origins, revolutionary goals in othercontexts, such as theComite's d'action lyce'en oftheFrenchstudent revoltof 1968or theworkers' cellsin tsarist Russia describedand advocated by Lenin ([1902] 1973). It is true,ofcourse,thatforother purposesone wantsto investigate the detailsof such organizational the elements that resources, to understand are criticalto theirusefulness as resourcesforsuch a purpose,and to examinehow theycame intobeingin a particular case. But theconcept of social capital allows takingsuch resources and showing theway theycan be combinedwith otherresourcesto producedifferent besystem-level havioror, in othercases, different outcomesforindividuals.Although, forthese purposes,social capital constitutes an unanalyzedconcept,it of value has been signalsto the analystand to the readerthatsomething available and thatthe producedforthoseactorswho have thisresource value depends on social organization. It thenbecomesa second stagein theanalysisto unpacktheconcept, ofsocial to discover whatcomponents contribute to the value produced. organization

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American Journalof Sociology In previouswork, Lin (1988) and De Graf and Flap (1988), froma of methodological perspective individualism similarto thatused in this social resources are used instrumentally paper,have shownhow informal in achievingoccupationalmobility in the UnitedStates and, to a lesser in WestGermany Lin focused and theNetherlands. extent, on social ties, of especially"weak" ties,in thisrole. Here, I want to examinea variety resources, all of whichconstitute social capital foractors. Beforeexamining empirically thevalue ofsocial capitalin thecreation ofhumancapital,I will go moredeeplyintoan examination ofjust what it is about social relations thatcan constitute usefulcapital resources for individuals. and Trustworthiness of Structures Obligations,Expectations, If A does something forB and trusts B to reciprocate in the future, this in A and an obligation establishes an expectation on the partof B. This can be conceivedas a credit obligation slip held byA forperformance by B. If A holdsa largenumber ofthesecredit slips,fora number ofpersons withwhomA has relations, thentheanalogyto financial capitalis direct. These creditslips constitute a large body of creditthatA can call in if necessary-unless,ofcourse,theplacement oftrust has beenunwise,and theseare bad debtsthatwill not be repaid. In somesocial structures, it is said that"peopleare alwaysdoingthings foreach other."There are a large numberof thesecreditslips outstanding,often on bothsidesofa relation (for thesecredit slipsappearoften not to be completely acrossareas ofactivity, so thatcredit fungible slipsofB held byA and thoseofA held byB are notfully used to canceleach other an out). The El Khalili marketin Cairo, describedearlier,constitutes extreme case of such a social structure. In othersocial structures where individualsare moreself-sufficient and depend on each otherless, there are fewerof thesecreditslips outstanding at any time. This form ofsocial capitaldependson two elements: of trustworthiness thesocial environment, willbe repaid,and whichmeansthatobligations theactual extent ofobligations in boththese held. Social structures differ and actorswithinthe same structure in the second.A differ dimensions, case thatillustrates is thevalue ofthetrustworthiness oftheenvironment thatof the rotating-credit associationsof SoutheastAsia and elsewhere. These associations who typically meet are groupsoffriends and neighbors each personcontributing to a centralfundthatis thengivento monthly, one of the members of a number (through biddingor by lot), until,after each ofthen personshas made n contributions and receivedone months, payout.As Geertz(1962) pointsout, theseassociationsserveas efficient S102

Social Capital an iminstitutions foramassing savingsforsmall capital expenditures, portant aid to economicdevelopment. of among the members But withouta highdegreeof trustworthiness the group,the institution could not exist-for a personwho receivesa could abscond and leave the payout early in the sequence of meetings otherswitha loss. For example,one could not imaginea rotating-credit in urbanareas markedbya highdegree successfully association operating of social disorganization-or,in otherwords,by a lack of social capital. in both dimensionsmay arise for a in social structures Differences in the actual needs thatpersons variety of reasons.There are differences ofothersourcesofaid (suchas government have forhelp,in theexistence (which reducesaid needed welfareservices),in the degreeof affluence to lend aid and ask in the tendency in culturaldifferences from others), in thelogistics foraid (see Banfield1967)in theclosureofsocialnetworks, Schachter, and Back 1963), and other of social contacts(see Festinger, factors.Whateverthe source, however,individualsin social structures at any timehave moresocial outstanding withhighlevels of obligations obligations of outstanding capital on whichtheycan draw. The density of that the overall usefulness of the tangibleresources means, in effect, that social structure is amplifiedby theiravailabilityto otherswhen needed. in thenumberof credit also differ Individualactorsin a social system on whichtheycan draw at anytime.The mostextreme slipsoutstanding in structured extendedfamilysettings, examples are in hierarchically large set of holds an extraordinarily which a patriarch(or "godfather") obligations that he can call in at any timeto get what he wants done. Near this extremeare villages in traditionalsettingsthat are highly with certainwealthyfamilieswho, because of theirwealth, stratified, have builtup extensive creditsthattheycan call in at any time. in a in politicalsettings a legislator such as a legislature, Similarly, withextraresources (such as theSpeakeroftheHouse ofRepreposition can, or theMajorityLeader oftheSenatein theU.S. Congress) sentatives fromother use of resources,build up a set of obligations by effective legislatorsthat makes it possible to get legislationpassed that would social constitutes ofobligations otherwise be stymied. This concentration butusefulalso in legislator capitalthatis usefulnotonlyforthispowerful an increasedlevel of action on the part of a legislature. Thus, getting those membersof legislatures among whom such creditsare extensive and debits credits thanthosewithout extensive shouldbe morepowerful on manyissues.It to producebloc voting because theycan use thecredits are forexample,thatin theU.S. Senate,somesenators is well recognized, are not. This members of what is called "the Senate Club," whileothers S103

American Journal of Sociology in effect meansthatsome senators are embeddedin thesystem of credits and debits, while others,outside the "Club," are not. It is also well recognized thatthosein theClub are morepowerful thanthoseoutsideit. Information Channels An important formof social capital is the potential forinformation that in social relations.Information inheres is important in providing a basis foraction. But acquisitionof information is costly.At a minimum, it requires attention, whichis alwaysin scarcesupply.One meansbywhich information can be acquired is by use of social relations that are maintained forotherpurposes. Katz and Lazarsfeld(1955) showed how this operatedforwomenin severalareas of lifein a midwestern cityaround in beingin fashion, 1950.Theyshowedthata womanwithan interest but no interest in beingon theleadingedge of fashion, used friends who she knewkeptup withfashion as sourcesofinformation. Similarly, a person in current who is not greatly in interested eventsbut who is interested about important can save thetimeofreadbeinginformed developments ing a newspaperby depending on spouse or friends who pay attention to A social scientist in beingup-to-date such matters. on who is interested researchin related fieldscan make use of everydayinteractions with in whichmostcolleagueskeep colleaguesto do so, but onlyin a university up-to-date. All theseare examplesofsocial relations thatconstitute a form ofsocial in capital thatprovidesinformation thatfacilitates action. The relations thiscase are notvaluable forthe"credit of slips"theyprovidein theform that one holds forothers'performances or forthe trustworobligations thinessof the otherpartybut merely forthe information theyprovide. Normsand Effective Sanctions When a normexistsand is effective, it constitutes a powerful, though sometimes fragile,formof social capital. Effective normsthat inhibit crimemake it possibleto walk freely in a cityand enable outsideat night old personsto leave their fearfortheir Normsin a houseswithout safety. thatsupportand provideeffective rewardsforhighachievecommunity mentin school greatly facilitate the school'stask. A prescriptive an especially normwithina collectivity thatconstitutes formof social capital is the normthatone shouldforgoselfimportant A normof this sort, and act in the interests of the collectivity. interest reinforced by social support,status, honor,and otherrewards,is the as theygrow social capital thatbuildsyoungnations(and thendissipates in families members to act selflessly older),strengthens by leadingfamily S104

Social Capital ofnascentsocialmovethedevelopment "thefamily's" interest, facilitates a small groupofdedicated,inward-looking, and mutually mentsthrough rewarding members, and in generalleads personsto workforthepublic in others, they good. In some of thesecases, the normsare internalized; are largelysupportedthroughexternalrewardsforselfless actions and disapproval for selfishactions. But, whethersupportedby internalor the in overcoming externalsanctions,normsof this sortare important public goods problemthatexistsin collectivities. effective normscan constitute a powerAs all theseexamplessuggest, ful formof social capital. This social capital, however,like the forms describedearlier,notonlyfacilitates certainactions;it constrains others. A community normsabout youngpersons'bewithstrong and effective havior can keep themfrom"having a good time." Normsthat make it of criminals the activities possibleto walk alone at nightalso constrain norms that as well). Even prescriptive (and in some cases ofnoncriminals thatsaysthata boy rewardcertain actions,like thenormin a community who is a good athleteshould go out forfootball,are in effect directing otheractivities. normsin an area can reduce Effective energy away from but innovativeness in an area, notonlydeviantactionsthatharmothers also deviant actions that can benefiteveryone. (See Merton [1968, pp. 195-203] fora discussionof how thiscan come about.) SOCIAL STRUCTURE THAT FACILITATES SOCIAL CAPITAL All social relationsand social structures facilitate some formsof social and continuethemwhen capital; actorsestablishrelationspurposefully howCertainkindsof social structure, theycontinue to providebenefits. in facilitating of social capital. someforms ever,are especially important Closureof Social Networks of social relations on whicheffective norms One property dependis what I will call closure. In general, one can say that a necessarybut not sufficient conditionforthe emergence of effective normsis action that 1977; Coleman imposesexternal effects on others(see Ullmann-Margalit or ento limitnegativeexternal effects 1987). Norms arise as attempts wherethesecondicouragepositiveones. But, in manysocial structures tionsexist,normsdo not come intoexistence. The reasonis what can be describedas lack of closureof the social structure. Figure 1 illustrates like thatoffigure la, actorA, havingrelations why.In an open structure withactorsB and C, can carryout actionsthatimposenegativeexternalities on B or C or both. Since theyhave no relations withone another, but with othersinstead(D and E), thentheycannotcombineforcesto S105

American Journalof Sociology D E

A (a)
FIG.

A (b)

1.-Networkwithout (a) andwith (b) closure

B or C alone is A in orderto constrain theactions.Unless either sanction sufficiently harmed and sufficiently powerfulvis-a-visA to sanction like unabated.In a structure withclosure, alone,A's actionscan continue or thatoffigure sanction, lb, B and C can combineto providea collective eithercan reward the otherfor sanctioning A. (See Merry[1984] for examplesoftheway gossip,whichdependson closureofthesocial structure,is used as a collectivesanction.) In the case of normsimposedby parentson children, closureof the which I will call structure requiresa slightly more complexstructure, by intergenerational closure.Intergenerational closuremay be described a simplediagramthatrepresents relations betweenparentand childand relations outsidethe family.Considerthe structure of two communities, 2. The verticallinesrepresent acrossgenrepresented by figure relations lines represent erations,betweenparentand child,while the horizontal 2a and relations withina generation. The pointlabeled A in bothfigure 2b represents theparentof childB, and thepointlabeled D reprefigure the sents the parentof child C. The lines betweenB and C represent thatexistwithin theother relations amongchildren any school.Although relationsamong childrenwithinthe school are not shown here, there existsa high degreeof closureamong peers, who see each otherdaily, have expectations toward each other,and develop normsabout each other'sbehavior. The two communities differ, however,in the presenceor absence of in the school. For the school reprelinksamong the parentsof children 2b, there sentedbyfigure is intergenerational closure;forthatrepresented in thelowercommunity by figure 2a, thereis not. To put it colloquially, represented by 2b, the parents'friends are the parentsof theirchildren's In the other,theyare not. friends. S106

Social Capital
E A D E

B (a)

B (b)

(B, C) without (a) and parents (A,D) andchildren FIG.2.-Networkinvolving with closure. (b) intergenerational The consequence of this closure is, as in the case of the wholesale diamondmarketor in othersimilarcommunities, a set of effective sancin figure tionsthatcan monitor 2b, and guidebehavior.In thecommunity A and D can discusstheirchildren's activities and come to some parents consensus by about standards and about sanctions. ParentA is reinforced his child'sactions;beyondthat,parentD constiparentD in sanctioning tutesa monitor notonlyforhis own child,C, but also fortheother child, of B. Thus, theexistence ofintergenerational closureprovidesa quantity social capitalavailable to each parentin raising his children-not onlyin matters relatedto school but in othermatters as well. of Closureofthesocial structure is important notonlyfortheexistence of social capital: the trustworeffective normsbut also foranotherform ofobligations thiness of social structures and thatallows theproliferation ofimposing a negaDefection from an obligation is a form expectations. or another.Yet, in a structure without tive externality closure,it can be ifat all, onlybythepersonto whomtheobligation effectively sanctioned, is owed. Reputationcannot arise in an open structure, and collective S107

AmericanJournalof Sociology cannotbe applied. Thus, we sanctions thatwould ensuretrustworthiness in a social structure. may say thatclosurecreatestrustworthiness

Appropriable Social Organization are brought into being to aid some purposeof Voluntary organizations thosewho initiate them.In a housingprojectbuiltduringWorldWar II in an easterncityof the UnitedStates, therewere manyphysicalproblemscaused bypoorconstruction: faulty plumbing, crumbling sidewalks, and otherdefects(Merton,n.d.). Residentsorganizedto confront the buildersand to address theseproblemsin otherways. Later, when the problems weresolved,theorganization remained as available social capihad resources tal thatimproved thequalityoflifeforresidents. Residents available thattheyhad seen as unavailablewheretheyhad lived before. in the com(For example,despitethe factthatthe numberof teenagers were morelikelyto expresssatisfaction munitywas smaller,residents withthe availabilityof teenagebabysitters.) in the New York Typographical Printers Union who were monotype a MonotypeClub as a social club (Lipset, Trow, and operators formed looked formonotype and Coleman 1956). Later, as employers operators an as monotype operators looked forjobs, bothfoundthisorganization the organization effective employment referral serviceand appropriated forthispurpose.Stilllater,whenthe Progressive Partycame intopower in theNew York Union, theMonotypeClub servedas an organizational The MonotypeClub resource forthe IndependentPartyas it leftoffice. servedas an important sourceofsocial capitalfortheIndesubsequently to sustainthepartyas an organizedopposition whileit was out pendents of office. In theexampleofSouthKorean student radicalsused earlier, thestudy circleswere describedas consisting of groupsof students from the same highschoolor hometown or church.Here, as in theearlierexamples,an thatwas initiated forone purposeis available forappropriaorganization tionforotherpurposes,constituting social capitalfortheindiimportant vidual members, who have available to themtheorganizational resources necessary foreffective opposition.These examplesillustrate the general once brought into existence forone set of purpoint,thatorganization, social capital available for poses, can also aid others,thus constituting use. It is possibleto gain insight intosomeofthewaysin whichclosureand social organization appropriable providesocial capitalbyuse ofa distincand multiplex relationmade byMax Gluckman(1967) betweensimplex S108

Social Capital (neightions.3In the latter,personsare linkedin morethanone context fellow etc.),whilein theformer, bor,fellowworker, parent, coreligionist, The central proppersonsare linkedthrough onlyone of theserelations. ofone relationof a multiplex relation is thatit allows the resources erty ship to be appropriatedfor use in others.Sometimes,the resourceis who see each other as neighbors as whentwoparents merely information, itis the activities; sometimes, exchange information about their teenagers' X, whichthe obligations that one personowes a second in relationship in relationship secondpersoncan use to constrain the actionsof thefirst in theform Y. Often, itis resources ofother persons who have obligations in one contextthat can be called on to aid when one has problemsin anothercontext. SOCIAL CAPITAL IN THE CREATION OF HUMAN CAPITAL and illustrating The preceding pages have been directed towarddefining social capital in general.But thereis one effect of social capital that is its effect especiallyimportant: on the creationof human capital in the and social capitalin the nextgeneration. Both social capitalin thefamily genercommunity play rolesin thecreation ofhumancapitalin therising ation. I will examineeach of thesein turn. Social Capital in the Family in theexamination on achieveoftheeffects ofvariousfactors Ordinarily, mentin school,"family is considered a singleentity, distinbackground" guishedfromschoolingin its effects. But thereis not merelya single separableintoat "family background"; family background is analytically least threedifferent components: financialcapital, human capital, and social capital. Financial capital is approximately measuredby the family's wealth or income. It providesthe physicalresourcesthat can aid achievement:a fixedplace in the home for studying, materialsto aid learning,the financialresourcesthat smoothfamilyproblems.Human the measuredbyparents' educationand provides capitalis approximately for the child that aids learning. potentialfor a cognitiveenvironment Social capital withinthe familyis different fromeitherof these. Two exampleswill give a sense of what it is and how it operates. JohnStuartMill, at an age beforemost childrenattendschool, was taughtLatin and Greekby his father, JamesMill, and laterin childhood
3 I am especially distinction for reminding meofGluckman's grateful toSusanShapiro

and pointing out therelevance ofit to myanalysis.

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American Journalof Sociology would discusscritically withhis father and withJeremy Benthamdrafts of his father's manuscripts. JohnStuartMill probablyhad no extraordinarygeneticendowments, and his father's learning was no moreextensive thanthatof some othermen of thetime.The central difference was the time and effort spent by the fatherwith the child on intellectual matters. In one publicschooldistrict in theUnitedStateswheretextsforschool use were purchased by children'sfamilies, school authoritieswere ofAsian immigrant puzzledto discoverthata number families purchased two copies of each textbook needed by the child. Investigation revealed in order thatthefamily to study purchasedthesecondcopyforthemother to help her child do well in school. Here is a case in whichthe human capital of the parents, at least as measured traditionally by years of schooling,is low, but the social capital in the familyavailable forthe child'seducationis extremely high. These examplesillustrate the importance of social capital withinthe familyfor a child's intellectual development.It is of course true that childrenare strongly affected by the human capital possessed by their to outcomesforchilparents.But thishuman capital may be irrelevant drenifparentsare not an important partoftheirchildren's lives,iftheir human capital is employedexclusively at workor elsewhere outsidethe home. The social capital of the family is the relations betweenchildren and parents(and, when familiesinclude othermembers,relationships is withthemas well). That is, ifthe humancapital possessedby parents not complemented by social capital embodied in familyrelations, it is irrelevant to the child's educationalgrowth that the parenthas a great deal, or a small amount,of humancapital.4 I will notdifferentiate hereamongtheforms ofsocial capitaldiscussed of the relations earlier,but will attempt merely to measurethe strength betweenparentsand childas a measureof the social capital available to thechildfrom theparent.Nor will I use theconceptin thecontext ofthe done in use of the paradigmof rationalaction,as, forexample,is often in educationthata conceptof humancapital to examinetheinvestments rationalperson would make. A portionof the reason forthis lies in a of much social capital not shown by mostforms of capital (to property
The complementarity ofhumancapitaland socialcapitalin thefamily fora child's development suggests thatthe statistical analysis thatexamines theeffects of these quantities should takea particular form. Thereshould be an interaction term between humancapital(parents' education) and socialcapital(somecombination ofmeasures such as two parents in the home,number of siblings, and parents' for expectations child'seducation). In theanalysis reported, here,however, a simple additive model without interaction was used.
I

SilO

Social Capital which I will turnin a later section):its public goods character, which leads to underinvestment. Social capitalwithin thefamily thatgivesthechildaccess to theadult's human capital depends both on the physicalpresenceof adults in the and on theattention family givenbytheadultsto thechild.The physical absence of adults may be describedas a structural deficiency in family social capital. The most prominent elementof structural in deficiency modern is thesingle-parent families family. However,thenuclearfamily in whichone or bothparents itself, workoutsidethehome,can be seenas structurally deficient, lackingthesocial capitalthatcomeswiththepresence ofparentsduringtheday, or withgrandparents or auntsand uncles in or near the household. Even ifadultsare physically present, there is a lack ofsocial capitalin thefamily ifthereare not strong relations betweenchildren and parents. The lack ofstrong in a relations can result from thechild'sembeddedness in relationships from the parents'embeddedness youthcommunity, with otheradults thatdo not crossgenerations, or from othersources.Whatever the source,it means thatwhatever humancapital existsin theparents,thechilddoes notprofit from it becausethesocial capitalis missing. The effects ofa lack ofsocial capitalwithin thefamily differ fordifferent educationaloutcomes.One forwhichit appears to be especiallyimportantis droppingout of school. With the High School and Beyond in high schools,table 1 shows the expecteddropout sample of students ratesforstudents in different typesoffamilies whenvariousmeasuresof social and humancapital in thefamily and a measureof social capitalin the community An explanation is necessary are controlled statistically.5 forthe use of numberof siblingsas a measureof lack of social capital. The numberof siblingsrepresents, in this interpretation, a dilutionof adult attention to the child. This is consistent with researchresultsfor
5 The analysis is carried outbyuse ofa weighted logistic model with a random sample of4,000students from thepublicschools in thesample.The variables included in the modelas measures ofthefamily's financial, human, and socialcapitalweresocioeconomicstatus(a singlevariableconstructed of parents' education, parents' income, father's occupational status,and household possessions), race, Hispanicethnicity, number ofsiblings, ofchanges number in schooldue tofamily residential movessince fifth grade,whether mother worked before thechildwas in school, mother's expectationof child'seducational attainment, frequency of discussions withparents about personalmatters, and presenceof both parentsin the household. The regression coefficients and asymptotic standard errors aregiven intheApp. tableAl. Ananalysis withmoreextensive statistical controls, including such things as gradesin school, homework, and number of absences,is reported in Hoffer (1986,table25), but the effects in table1 and subsequent reported textare essentially fora unchanged except reduced effect of mother's expectations. The results reported hereand subsequently are takenfrom Hoffer (1986)and from Colemanand Hoffer (1987).

Sill

Journalof Sociology American

TABLE 1
DROPOUT WHOSE RATES BETWEEN DIFFER SPRING, GRADE 10, AND SPRING, GRADE 12, FOR STUDENTS CAPITAL FAMILIES IN SOCIAL CAPITAL, CAPITAL CONTROLLING IN THE FAMILYa FOR HUMAN

AND FINANCIAL

in Percentage Difference Dropping Percentage Points Out 1. Parents'presence: ..................... Two parents .. .................. Singleparent ............... 2. Additionalchildren: .. ...... ................... One sibling .......... .................. ...... .. Four siblings ......... 3. Parentsand children: .. ............. Two parents,one sibling .......... .. ............. One parent,foursiblings .......... forchild'seducation: 4. Mother'sexpectation Expectationof college ............................ .. ............. of college .......... No expectation together: 5. Three factors expectscollege .... Two parents,one sibling,mother One parent,foursiblings,no collegeexpectation .....
a

13.1 19.1 10.8 17.2 10.1 22.6 J 11.6 l 20.2 8.1 30.6 J

6.0 6.4

12.5 8.6

22.5

Al. inApp.table more from fully reported logistic regression Estimates taken

and IQ, which show that test scores decline measuresof achievement and that with sib position,even when total familysize is controlled, scores decline with numberof childrenin the family.Both resultsare in largefamilies sibs and children withthe view thatyounger consistent whichproducesweakereducationaloutcomes. have less adult attention, Item 1 of table 1 shows that, when otherfamilyresourcesare conwho drop out betweenspringof the of students trolled,the percentage pointshigher yearis 6 percentage ofthesenior yearand spring sophomore forchildren families. Item 2 of table 1 showsthatthe from single-parent with foursiblings rate is 6.4 percentagepoints higherforsophomores but onlyone resources than forthose with otherwise equivalentfamily oftheratioofadults we can think sibling.Or, takingthesetwo together, the available for to children as a measureofthesocial capitalin thefamily educationof any one of them.Item 3 of table 1 shows thatfora sophoaverage backmorewithfoursiblingsand one parent,and an otherwise the rate is ground,the rate is 22.6%; withone siblingand two parents, points. of 12.5 percentage 10.1%-a difference not a pure although in thefamily, ofadult attention Another indicator measureof social capital, is the mother's of the child'sgoing expectation this without to college. Item 4 of the table shows that,forsophomores S1 12

Social Capital parentalexpectation, the rate is 8.6 percentage pointshigherthan for those with it. With the threesourcesof familysocial capital taken together, item5 of the table shows thatsophomores withone sibling,two on other parents,and a mother's expectation forcollege(stillcontrolling resources of family) have an 8.1% dropoutrate; withfoursiblings, one parent,and no expectation of the mother forcollege,the rateis 30.6%. These resultsprovidea less satisfactory testthan if the researchhad been explicitly designedto examine effects of social capital withinthe In addition,tableAl in theAppendixshowsthatanother family. variable thatshouldmeasuresocial capital in thefamily, thefrequency oftalking withparentsabout personalexperiences, showsessentially no relation to dropping out. Nevertheless, takenall together, thedata do indicatethat social capital in the familyis a resourcefor educationof the family's children, just as is financial and humancapital. Social Capital outsidethe Family The social capital thathas value fora youngperson'sdevelopment does not residesolelywithinthefamily. It can be foundoutsideas well in the ofthesocial relationships community consisting thatexistamongparents, in the closureexhibited by thisstructure of relations, and in theparents' relations withthe institutions of the community. The effect of thissocial capital outsidethe family on educationaloutcomes can be seen by examiningoutcomesforchildrenwhose parents in theparticular differ sourceofsocial capitaldiscussedearlier, intergencloerationalclosure.There is not a directmeasureof intergenerational This is thenumber of surein thedata, but thereis a proximate indicator. times the child has changed schools because the familymoved. For families thathave moved often, social the social relations thatconstitute capital are brokenat each move. Whateverthe degreeof intergenerationalclosureavailable to othersin the community, it is not available to parentsin mobilefamilies. The logisticregression carried out earlierand reportedin table Al its showsthatthecoefficient fornumber ofmovessincegrade5 is 10 times of any varistandarderror, the variablewiththe strongest overalleffect able in the equation, includingthe measuresof human and financial capital in the family(socioeconomic status)and the crude measuresof this in the earlieranalysis.Translating social capital introduced family into an effect on droppingout gives 11.8% as the dropoutrate if the has not moved, 16.7% if it has moved once, and 23.1% if it has family moved twice. In theHigh School and Beyonddata set,another variation amongthe schoolsconstitutes a usefulindicator of social capital. This is thedistincS113

American Journalof Sociology tionsamong public highschools,religiously based privatehighschools, based privatehighschools.It is the religiously based and nonreligiously highschoolsthatare surrounded by a community based on the religious These families closurethatis based organization. have intergenerational other on a multiplex relation: whatever relations they have, theadultsare in the same members of the same religious bodyand parentsof children school.In contrast, it is theindependent privateschoolsthatare typically fortheir least surrounded by a community, student bodiesare collections of students,most of whose familieshave no contact.6The choice of privateschool formost of these parentsis an individualistic one, and, althoughtheyback theirchildrenwith extensivehuman capital, they send theirchildren to theseschoolsdenudedof social capital. In theHigh School and Beyonddata set,thereare 893 publicschools, 84 Catholic schools, and 27 other private schools. Most of the other privateschoolsare independent schools,though a minority have religious In thisanalysis,I will at the outsetregardtheotherprivate foundations. of social schools as independent privateschools to examinethe effects capital outsidethe family. The resultsof these comparisons are shown in table 2. Item 1 of the table shows thatthe dropoutratesbetweensophomore and senioryears are 14.4% in publicschools,3.4% in Catholicschools,and 11.9% in other privateschools.What is moststriking is thelow dropoutratein Catholic schools. The rate is a fourth of thatin the public schoolsand a thirdof thatin the otherprivateschools. Adjustingthe dropoutrates fordifferences in student-body financial, human, and social capital among the three sets of schools by standardizing thepopulationoftheCatholicschoolsand other privateschools to the student-body backgroundsof the public schools shows that the differences are affected are not thedifferences onlyslightly. Furthermore, ofthestudents due to thereligion or to thedegreeofreligious observance. in public schoolare onlyslightly Catholicstudents less likely to dropout thannon-Catholics. at religious which Frequencyofattendance services, is itselfa measureof social capital through intergenerational closure,is relatedto dropoutrate, with 19.5% of public school students strongly who rarelyor never attenddroppingout comparedwith 9.1% of those who attendoften. But thiseffect existsapartfrom, and in additionto, the oftheschool'sreligious effect affiliation. forCatholic Comparablefigures
6 Data from thisstudyhave no directmeasures of the degreeof intergenerational closure amongtheparents oftheschoolto support thisstatement. theone However, measure ofintergenerational closure that doesexist in thedata,thenumber ofresidentialmovesrequiring schoolchange sincegrade5, is consistent with thestatement. The averagenumber of movesforpublicschoolstudents is .57; forCatholicschoolstudents,.35; and forstudents in other private schools,.88.

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Social Capital
TABLE 2
DROPOUT RATES BETWEEN SPRING, GRADE 10, AND SPRING, AMOUNTS COMMUNITY GRADE 12, FOR STUDENTS FROM SCHOOLS WITH DIFFERING OF SOCIAL

CAPITAL

IN THE SURROUNDING

Public
1. Raw dropout rates ................................ to average public 14.4

Catholic
3.4

Other Private Schools

11.9

2. Dropout

rates standardized

school sophomorea ...............................

14.4

5.2

11.6

Non-Catholic Religious Independent

3. Raw dropout rates for studentsb ............... from inde................... 3.7 10.0

pendent private

and non-Catholic schools

religious

a The standardization is based on separatelogisticregressions forthesetwo setsof schools,usingthe same variableslistedin n. 5. Coefficients and meansforthestandardization are in Hoffer (1986, tables5 and 24). b This tabulationis based on unweighted data, whichis responsible forthe factthat bothratesare lowerthan the rate forotherprivateschoolsin item 1 of the table, whichis based on weighted data.

school studentsare 5.9% and 2.6%, respectively (Coleman and Hoffer 1987, p. 138). The low dropout rates of the Catholic schools, the absence of low dropoutratesin the otherprivateschools,and the independent effect of frequency of religious attendanceall provideevidenceof theimportance of social capital outsidethe school,in the adult community surrounding it, forthisoutcomeof education. A further testis possible,fortherewereeightschoolsin the sampleof non-Catholic privateschools("otherprivate"in the analysisabove) that have religiousfoundations and over 50% of the studentbody of that religion.Three were Baptist schools,two were Jewish,and threefrom threeotherdenominations. If the inference is correct about the religious community's providing intergenerational closureand thus social capital and about the importance of social capital in depressing the chance of droppingout of high school, these schools also should show a lower dropoutrate than the independent private schools. Item 3 of table 2 showsthattheirdropoutrateis lower,3.7%, essentially thesame as that of the Catholic schools.7
I It is also true, though notpresented here,thatthelack ofsocialcapitalin thefamily makeslittle difference in dropout ratesin Catholicschools-or, in theterms I have used,socialcapitalin thecommunity compensates inpartfor itsabsence in thefamily. See Colemanand Hoffer (1987,chap. 5).

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American Journalof Sociology of social capitalfor above indicatetheimportance The data presented of social the educationof youth,or, as it mightbe put, the importance capital in the creationof human capital. Yet thereis a fundamental forms ofcapitalthathas difference betweensocial capitaland mostother of youth.It is thisdifference to forthe development strong implications whichI will turnin the nextsection. PUBLIC GOODS ASPECTS OF SOCIAL CAPITAL make it rights a privategood, and property Physicalcapitalis ordinarily possible for the person who investsin physicalcapital to capturethe in physical to invest capitalis not benefits itproduces.Thus, theincentive in physicalcapital bedepressed;thereis not a suboptimalinvestment of their cause those who invest in it are able to capture the benefits For humancapital also-at least humancapital of thesort investments. that is produced in schools-the personwho investsthe time and rein the formof a sources in buildingup this capital reaps its benefits work, or even the or higher-status higher-paying job, more satisfying all world-in short, understanding ofthesurrounding pleasureofgreater the benefits thatschooling bringsto a person. But most formsof social capital are not like this. For example,the thatmake possiblesocial normsand the sanckindsof social structures tionsthat enforce primarily the personor persons themdo not benefit whose efforts all would be necessaryto bringthemabout, but benefit those who are part of such a structure. For example, in some schools these wherethereexistsa dense set of associationsamongsome parents, are the resultof a small numberof persons,ordinarily mothers who do themselves not hold full-time jobs outsidethe home. Yet thesemothers ofthissocial capital surrounding experience onlya subsetof the benefits the school. If one of themdecides to abandon these activities-forexreasonableaction job-this maybe an entirely ample, to take a full-time froma personalpointof view and even fromthe pointof view of that may far of the new activity householdwith its children.The benefits the losses thatarise from withother thedeclinein associations outweigh parentswhose childrenare in the school. But the withdrawalof these activities constitutes a loss to all thoseotherparentswhose associations and contactswere dependent on them. the so thatthe father, Similarly, decisionto move froma community forexample,can take a better from thepoint correct job may be entirely of view of that family.But, because social capital consistsof relations among persons, otherpersons may experienceextensivelosses by the severanceofthoserelations, a severanceoverwhichtheyhad no control. S116

Social Capital thataid the A partofthoselossesis theweakening ofnorms and sanctions as a school in its task. For each family,the total cost it experiences consequenceofthedecisionsit and other families makemayoutweigh the benefits of those few decisionsit has controlover. Yet the beneficial consequences to thefamily ofthosedecisionsmade bythefamily mayfar outweigh the minorlosses it experiences from themalone. It is notmerely voluntary associations, suchas a PTA, in whichunderinvestment of this sort occurs. When an individualasks a favorfrom another, thusincurring an obligation, he does so because it brings hima neededbenefit; he does notconsider thatit does theother a benefit as well by addingto a drawingfundofsocial capital available in a timeofneed. If the first individual can satisfyhis need through self-sufficiency, or through aid from someofficial sourcewithout incurring an obligation, he will do so-and thus fail to add to the social capital outstanding in the community. Similar statements can be made with respectto trustworthiness as social capital. An actorchoosing to keeptrust or not(orchoosing whether to devoteresources to an attempt is doingso on thebasis of to keep trust) he himself costs and benefits will experience.That his trustworthiness willfacilitate others' actionsor thathislack oftrustworthiness willinhibit others' actions does not enter into his decision. A similar but more can be made forinformation as a form of social capiqualifiedstatement for another tal. An individual who serves as a source of information forhis because he is well informed ordinarily acquires thatinformation own benefit, notfortheothers who make use ofhim. (This is notalways true.As Katz and Lazarsfeld[1955] show, "opinionleaders"in an area in partto maintain their as opinionleaders.) acquireinformation position For normsalso, the statement mustbe qualified.Normsare intentionally established,indeed as means of reducingexternalities, and their are ordinarily benefits forestabcapturedby thosewho are responsible lishing them.But thecapability ofestablishing and maintaining effective normsdependson properties ofthesocial structure (suchas closure)over which one actor does not have controlyet are affected by one actor's action.These are properties thataffect thestructure's capacityto sustain effective norms,yetproperties thatordinarily do not enterintoan individual's decisionthataffects them. ofsocial capitalhave theproperty can be Some forms thattheir benefits capturedby thosewho investin them;consequently, rationalactorswill in thistypeof social capital. Organizations notunderinvest thatproduce a privategood constitute is thatthere theoutstanding example.The result in organizations willbe in society an imbalancein therelative investment thatproduceprivategoods fora market and relaand thoseassociations S117

American Journalof Sociology tionships in which the benefits are not captured-an imbalancein the of social sensethat,ifthepositiveexternalities form createdby thelatter it would come to existin greater capital could be internalized, quantity. The public goods qualityof most social capital means that it is in a fundamentally different position withrespect to purposive actionthanare mostotherformsof capital. It is an important resourceforindividuals and may affect greatly theirabilityto act and theirperceivedqualityof life.They have the capability of bringing it intobeing.Yet, because the benefits of actionsthatbringsocial capital intobeingare largely experienced by personsotherthan the actor, it is oftennot in his interest to bringit into being. The resultis that most formsof social capital are This social capital createdor destroyed as by-products ofotheractivities. arisesor disappearswithout anyone'swilling it intoor out ofbeingand is thus even less recognized and taken accountof in social actionthan its alreadyintangible character would warrant. There are important implications of thispublic goods aspect of social capital that play a part in the development of children and youth.Beofsupcause thesocial structural theproblems conditions thatovercome plyingthese public goods-that is, strongfamiliesand strong communities-are muchless often present now thanin thepast, and promise to in thefuture, be even less present we can expectthat,ceteris paribus,we a declining confront of humancapitalembodiedin each succesquantity The obvious solutionappears to be to attempt to find sive generation. theproblem of supplyof thesepublicgoods,thatis, ways of overcoming social capital employedforthe benefit of children and youth.This very likelymeans thesubstitution of some kindof formal organization forthe voluntary and spontaneous social organization thathas in the past been the major sourceof social capital available to theyoung. CONCLUSION In thispaper,I have attempted to introduce intosocial theory a concept, "social capital," parallelingthe conceptsof financialcapital, physical capital, and human capital-but embodiedin relations among persons. This is partof a theoretical strategy thatinvolvesuse of theparadigmof rationalactionbut without theassumption ofatomistic elements stripped of social relationships. I have shown the use of this conceptthrough theeffect ofsocial capitalin thefamily and in thecommudemonstrating nityin aiding the formation of human capital. The singlemeasureof human capital formation used forthis was one that appears especially in highschooluntil responsive to the supplyof social capital, remaining graduationversus droppingout. Both social capital in the familyand social capital outsideit, in the adult community the school, surrounding S118

Social Capital of showed evidence of considerablevalue in reducingthe probability dropping out of highschool. forms wereidentified: In explicating theconceptofsocial capital,three of the which depend on trustworthiness obligationsand expectations, information-flow capabilityof the social structure, social environment, sharedby mostforms and normsaccompaniedby sanctions.A property it fromotherformsof capital is its of social capital that differentiates social capital ordipublic good aspect: the actoror actorswho generate a factthatleads to underincaptureonlya smallpartofitsbenefits, narily in social capital. vestment

APPENDIX
TABLE Al
LOGISTIC REGRESSION COEFFICIENTS AND ASYMPTOTIC STANDARD ERRORS FOR EFFECTS OF STUDENT BACKGROUND CHARACTERISTICS ON DROPPING OUT OF HIGH
SCHOOL BETWEEN SOPHOMORE AND SENIOR YEARS,

1980-82, PUBLIC

SCHOOL

SAMPLE

b
Intercept ................................................ Socioeconomic status .................. ..................... Black ................................................ Hispanic ................................................ .................... Number of siblings .................... ................. Mother worked while child was young ...... ...................... Both parents in household ............ ................... Mother's expectation for college .......... ......................................... Talk with parents . ................... Number of moves since grade 5 .......... SOURCE.-Taken fromHoffer (1986).

SE
.169

-2.305 -.460
-.161 .104 .180 - .012

.077
.162 .138 .028 .103 .112 .103 .044 .040

-.415 -.685
.031 .407

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