The Effect Of Social Capital On Poor Household Income

Social capital has emerged to be a hot topic in recent academic world since the mid-1990s. The scholars of multiple disciplines, such as economics, politics and sociology, extensively held heated discussions about the connotation and function of social capital, which was also developed as a dedicated research by the Word Bank and other international institutions. On account of the capability of summarizing and interpreting the phenomenon in the economic growth and social development, social capital is viewed as the third form of capital integrated into the research framework of economics, besides the physical capital and human capital.As the largest developing country, China has traversed an extraordinary course and scored tremendous achievements in the Poverty Alleviation Project since1980s. Since the implementation of the rural anti-poverty program for the first ten years of the21st century, China has successfully achieved the goal of cutting extreme poverty by half, included in the United Nations Millennium Development Goals.Although our economy keeps growing at a decent rate, we cannot play down the difficulties our country is facing:lower GDP per capita, wide gap of wealth and kinds of evident livelihood issues.Studies show that social capital produces positive impacts on economic growth. Based on the special cultural background of our country, the unique social network and values have an important influence on the economic individual behavior. The growth of economic can be expressed as the growth of family income from the angle of micro-level, and it’s of practical significance to study the effect of social capital to the economic growth.Through the collection and comparison of foreign and domestic relative literatures, this paper provides the definition of relevant concepts. Employing the theory analysis, this article firstly analyzes the direct route and a selective way of influence to economic by social capital, and establishes the family production function with the social capital embedded. Then the empirical study is undertaken to analyze the impact of the capital on the family income. After that the paper carries on a contrast analysis of the impact in rural families and urban families. Finally, basing on the theory analysis and case study, the article puts forward suggestions for the government and the poor family.Chapter1is introduction of the dissertation. This part firstly puts forward the background and significance of the research, then reviews the development of the foreign and domestic studies. At last, the research idea and structure are introduced.Chapter2is a Literature summarization and the definition of relevant concepts. This section begins with a brief review of the development of concept of social capital, including views of representative scholars and institutions. Then the paper studies the relevant concepts of social capital such as the level and measurement. Finally the section reviews the research in the relationship between social capital and economic growth, relationship between social capital and human capital.Chapter3is the theoretical analysis of the study, which focuses on the effect mechanism of social capital to economic growth. According to the analysis, the paper confirms that dimensions of social capital have a direct positive influence on economic behavior, such as trust, network and forms. On the other hand, there is interaction between social capital and human capital, which means they can influence each other. Investing social capital could promote the accumulation of human capital by way of influencing educational investment and labor mobility, and the human capital could help develop the quality of the networks and improve the trust, reciprocity, and enthusiasm of participating in activities. In the last part, the paper establishes the family production function with the social capital embedded.Chapter4is the empirical analysis based on the survey data. Firstly, the article describes the data source, variables and the measurement of them. Secondly, the results of the empirical analysis show that family income is acquired according to the joint action of household physical capital, human capital, and social capital. The effect of physical capital is more pronounced in urban families, while the human capital and social capital have a more significant effect on the income of rural families.Chapter5is the conclusion of the whole study. The findings of the theory analysis and empirical study is firstly consulted and summarized. Based on that, policy recommendations are provided according to the situations in our country.The innovation of this paper lies in two points. Firstly, it’s from the angle of social capital that the study analyzes the micro-economic growth, and the effect mechanism of social capital to economic growth is elaborated. The second point is the regression analysis based on the data from poor families in typical areas.Due to the limitation of data and academic level, this article has some shortcomings. On the one hand, the interaction between social capital and human capital isn’t verified in the empirical analysis. On the other hand, the research can’t carry on a comparative analysis due to the section data.