Divided we fall? The effect of manufacturing decline on the social capital of US communities

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: What happens to local communities when manufacturing disappears? I examine changes in associational density over nearly two decades as a proxy for social capital in US labor markets. Exploiting plausibly exogenous trade‐induced shocks to local manufacturing activity, I test whether deindustrialization is associated with greater or lower organizational membership. I uncover a robust negative relationship between the two variables, particularly acute in rural and mostly‐White areas. My findings, however, are sensitive to measurement: There are no clearly discernible effects of deindustrialization on social capital when I consider alternative proxies for the outcome. To reconcile these results, I present evidence suggesting that economic adversity may induce a qualitative, rather than quantitative, change in social capital.

Keywords: deindustrialization; regional labor markets; social capital (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Date: 2023-09-01
New Economics Papers: this item is included in nep-geo, nep-soc and nep-ure
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Published in Journal of Regional Science, 1, September, 2023. ISSN: 0022-4146

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:120355

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