In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analysis ol dropouts from high school. Use of the concept of social capital is part of a general theoretical strategy discussed in the paper: taking rational action as a starting point but rejecting the extreme individualistic premises that often accompany it. The conception of social capital as a resource for action is one way of introducing social structure into the rational action paradigm. Three forms of social capital are examined: obligations and expectations, information channels, and social norms. The role of closure in the social structure in facilitating the first and third of these forms of social capital is described.

DEFINE: Defines social capital as a resource for action and as a way to inject social structure into the rational action paradigm.

Use of the concept of social capital is part of a general theoretical strategy discussed in the paper: taking rational action as a starting point but rejecting the extreme individualistic premises that often accompany it. The conception of social capital as a resource for action is one way of introducing social structure into the rational action paradigm.

DEFINE: Positions social capital as a theoretical device that keeps rational action assumptions while incorporating social structure, contrasting with extreme individualism.

There are two broad intellectual streams in the description and explanation of social action. One, characteristic of the work of most sociologists, sees the actor as socialized and action as governed by social norms, rules, and obligations. … The other intellectual stream, characteristic of the work of most economists, sees the actor as having goals independently arrived at, as acting independently, and as wholly self-interested.

Builds on: "Rational action theory becomes social by incorporating social structure."

The sociological stream has what may be a fatal flaw as a theoretical enterprise: the actor has no "engine of action." The actor is shaped by the environment, but

The economic stream, on the other hand, flies in the face of empirical reality: persons' actions are shaped, redirected, constrained by the social context; norms, interpersonal trust, social networks, and social organization are important in the functioning not only of the society but also of the

A number of authors from both traditions have recognized these difficulties and have attempted to impart some of the insights and orientations of the one intellectual stream to the other. In economics, Yoram Ben-Porath (1980) has developed ideas concerning the functioning of what he calls the "F-connection" in exchange systems. The F-connection is families, friends, and firms, and Ben-Porath, drawing on literature in anthropology and sociology as well as economics, shows the way these forms of social organization affect economic exchange.

XREF: Connects to economic sociology and embeddedness literature, e.g., Granovetter's work on social networks influencing economic behavior.

Granovetter (1985) has engaged in a broad attack on the "undersocialized concept of man" that characterizes economists' analysis of economic activity. Granovetter first criticizes much of the new institutional economics as crudely functionalist because the existence of an economic institution is often explained merely by the functions it performs for the economic system. He argues that, even in the new institutional economics, there is a failure to recognize the importance of concrete personal relations and networks of relations-what he calls "embeddedness"-in generating trust, in establishing expectations, and in creating and enforcing norms.

DEFINE: Granovetter introduces 'embeddedness' as the concept that economic behavior operates within social networks of personal relations, not in isolation.

Granovetter first criticizes much of the new institutional economics as crudely functionalist because the existence of an economic institution is often explained merely by the functions it performs for the economic system. He argues that, even in the new institutional economics, there is a failure to recognize the importance of concrete personal relations and networks of relations-what he calls "embeddedness"-in generating trust, in establishing expectations, and in creating and enforcing norms.

DEFINE: Introduces Granovetter's concept of 'embeddedness' — concrete personal relations and networks that generate trust, expectations, and norms.

Granovetter's idea of embeddedness may be seen as an attempt to introduce into the analysis of economic systems social organization and social relations not merely as a structure that springs into place to fulfill an economic function, but as a structure with history and continuity that give it an independent effect on the functioning of economic systems.

My aim is somewhat different. It is to import the economists' principle of rational action for use in the analysis of social systems proper, including but not limited to economic systems, and to do so without discarding social organization in the process. The concept of social capital is a tool to aid in this.

DEFINE: Introduces social capital as the conceptual tool bridging rational choice economics and sociological analysis of social organization. Builds on: "Rational action theory becomes social by incorporating social structure."

One was the limitation to microsocial relations, which abandons the principal virtue of economic theory, its ability to make the micro-macro transition from pair relations to system. … The other was the attempt to introduce principles in an ad hoc fashion, such as "distributive justice" (Homans 1964, p. 241) or the "norm of reciprocity" (Gouldner 1960). The former deficiency limits the theory's usefulness, and the latter creates a

XREF: Connects to sociological theory debates about micro-macro links, agency vs. structure, and the limits of exchange theory as critiqued in network sociology.

Social capital is defined by its function. It is not a single entity but a variety of different entities, with two elements in common: they all consist of some aspect of social structures, and they facilitate certain actions of actors-whether persons or corporate actors-within the structure. Like other forms of capital, social capital is productive, making possible the achievement of certain ends that in its absence would not be possible.

DEFINE: Social capital is defined functionally via social structures that facilitate actors' actions, not as a single entity.

Like physical capital and human capital, social capital is not completely fungible but may be specific to certain activities. A given form of social capital that is valuable in facilitating certain actions may be useless or even harmful for others.

DEFINE: Clarifies that social capital, like physical and human capital, is domain-specific — valuable in some activities but useless or harmful in others.

Inspection shows certain attributes of the social structure. A given merchant community is ordinarily very close, both in the frequency of interaction and in ethnic and family ties. The wholesale diamond market in New York City, for example, is Jewish, with a high degree of intermarriage, living in the same community in Brooklyn, and going to the same synagogues. It is essentially a closed community.

XREF: Connects to the classic economics/social-capital literature on the diamond trade as a closed network, echoing Granovetter's work on embeddedness.

The study circles themselves constitute a form of social capital-a cellular form of organization that appears especially valuable for facilitating opposition in any political system intolerant of dissent. Even where political dissent is tolerated, certain activities are not, whether the activities are politically motivated terrorism or simple crime. The organization that makes possible these activities is an especially potent form of social capital.

The "same high school or hometown or church" provides social relations on which the "study circles" are later built. The study circles themselves constitute a form of social capital-a cellular form of organization that appears especially valuable for facilitating opposition in any political system intolerant of dissent. Even where political dissent is tolerated, certain activities are not, whether the activities are politically motivated terrorism or simple crime. The organization that makes possible these activities is an especially potent form of social capital.

In the Kahn El Khalili market of Cairo, the boundaries between merchants are difficult for an outsider to discover. The owner of a shop that specializes in leather will, when queried about where one can find a certain kind of jewelry, turn out to sell that as well-or, what appears to be nearly the same thing, to have a close associate who sells it, to whom he will immediately take the customer. Or he will instantly become a money changer, although he is not a money changer, merely by turning to his colleague a few shops down. For some activities, such as bringing a customer to a friend's store, there are commissions; for others, such as money changing, merely the creation of obligations. Family relations are important in the market, as is the stability of proprietorship. The whole market is so infused with relations of the sort I have described that it can be seen as an organization, no less so than a department store. Alternatively, one can see the market as consisting of a set of individual merchants, each having an extensive body of social capital on which to draw, through the relationships of the market.

XREF: Anticipates modern network-economy and gig-economy scholarship where flexible ties and social capital substitute for formal structures.

Probably the most important and most original development in the economics of education in the past 30 years has been the idea that the concept of physical capital as embodied in tools, machines, and other productive equipment can be extended to include human capital as well (see Schultz 1961; Becker 1964). Just as physical capital is created by changes in materials to form tools that facilitate production, human capital is created by changes in persons that bring about skills and capabilities that make them able to act in new ways.

DEFINE: Frames 'human capital' as the extension of physical capital theory to skills and capabilities acquired through education and training.

Although, for these purposes, social capital constitutes an unanalyzed concept, it signals to the analyst and to the reader that something of value has been produced for those actors who have this resource available and that the value depends on social organization. It then becomes a second stage in the analysis to unpack the concept, to discover what components of social organization contribute to the value produced.

DEFINE: Coleman clarifies that 'social capital' initially functions as an unanalyzed signal of value produced by social organization, demanding later decomposition into its organizational components. Builds on: "Social capital enables outcomes unattainable without it."

If A does something for B and trusts B to reciprocate in the future, this establishes an expectation in A and an obligation on the part of B. This obligation can be conceived as a credit slip held by A for performance by B. If A holds a large number of these credit slips, for a number of persons with whom A has relations, then the analogy to financial capital is direct. These credit slips constitute a large body of credit that A can call in if necessary-unless, of course, the placement of trust has been unwise, and these are bad debts that will not be repaid.

XREF: This anticipates the concept of social capital popularized by Bourdieu, Putnam, and Coleman. The economic metaphor maps directly onto those later frameworks.

There are a large number of these credit slips outstanding, often on both sides of a relation (for these credit slips appear often not to be completely fungible across areas of activity, so that credit slips of B held by A and those of A held by B are not fully used to cancel each other out). The El Khalili market in Cairo, described earlier, constitutes an extreme case of such a social structure. In other social structures where individuals are more self-sufficient and depend on each other less, there are fewer of these credit slips outstanding at any time.

DEFINE: The 'credit slips' concept here describes the accumulated imbalance of favors/obligations in reciprocal relations — a metaphor for social debt that isn't immediately settled.

This form of social capital depends on two elements: trustworthiness of the social environment, which means that obligations will be repaid, and the actual extent of obligations held. Social structures differ in both these dimensions, and actors within the same structure differ in the second. A case that illustrates the value of the trustworthiness of the environment is that of the rotating-credit associations of Southeast Asia and elsewhere. These associations are groups of friends and neighbors who typically meet monthly, each person contributing to a central fund that is then given to one of the members (through bidding or by lot), until, after a number of months, each of the n persons has made n contributions and received one payout.

DEFINE: Clarifies the two components of this social capital form: environmental trustworthiness and the extent of obligations held, illustrated by rotating-credit associations. XREF: Connects to Coleman's broader social capital theory and to modern trust/peer-lending literature.

For example, one could not imagine a rotating-credit association operating successfully in urban areas marked by a high degree of social disorganization-or, in other words, by a lack of social capital.

DEFINE: This illustrates how social capital is defined operationally as the cohesion that makes informal institutions like credit associations viable. Builds on: "Rotating-credit associations thrive on interpersonal trust and held obligations."

The most extreme examples are in hierarchically structured extended family settings, in which a patriarch (or "godfather") holds an extraordinarily large set of obligations that he can call in at any time to get what he wants done. Near this extreme are villages in traditional settings that are highly stratified, with certain wealthy families who, because of their wealth, have built up extensive credits that they can call in at any time.

DEFINE: Illustrates how social capital functions as favor-credit in stratified traditional settings, contrasted with transactional exchange.

Individual actors in a social system also differ in the number of credit slips outstanding on which they can draw at any time. The most extreme examples are in hierarchically structured extended family settings, in which a patriarch (or "godfather") holds an extraordinarily large set of obligations that he can call in at any time to get what he wants done. … Near this extreme are villages in traditional settings that are highly stratified, with certain wealthy families who, because of their wealth, have built up extensive credits that they can call in at any time.

XREF: Connects to the concept of social capital and network theory — power as fungible obligations rather than direct authority. DEFINE: Introduces the 'credit slips' framework for understanding informal social power within hierarchies.

Similarly, in political settings such as a legislature, a legislator in a position with extra resources (such as the Speaker of the House of Representatives or the Majority Leader of the Senate in the U.S. Congress) can, by effective use of resources, build up a set of obligations from other legislators that makes it possible to get legislation passed that would otherwise be stymied. This concentration of obligations constitutes social capital that is useful not only for this powerful legislator but useful also in getting an increased level of action on the part of a legislature. Thus, those members of legislatures among whom such credits are extensive should be more powerful than those without extensive credits and debits because they can use the credits to produce bloc voting on many issues.

An important form of social capital is the potential for information that inheres in social relations. Information is important in providing a basis for action. But acquisition of information is costly. At a minimum, it requires attention, which is always in scarce supply. One means by which information can be acquired is by use of social relations that are maintained for other purposes.

XREF: Connects to Burt's structural holes and Granovetter's weak ties literature on information advantage in networks.

One means by which information can be acquired is by use of social relations that are maintained for other purposes. … All these are examples of social relations that constitute a form of social capital that provides information that facilitates action. The relations in this case are not valuable for the "credit slips" they provide in the form of obligations that one holds for others' performances or for the trustworthiness of the other party but merely for the information they provide.

DEFINE: Distinguishes information-providing social capital from obligation-based 'credit slip' social capital, clarifying a subtype of the concept.

A prescriptive norm within a collectivity that constitutes an especially important form of social capital is the norm that one should forgo selfinterest and act in the interests of the collectivity.

Pays off: "Social relations yield information at minimal additional cost."

A community with strong and effective norms about young persons' behavior can keep them from "having a good time." Norms that make it possible to walk alone at night also constrain the activities of criminals (and in some cases of noncriminals as well). Even prescriptive norms that reward certain actions, like the norm in a community that says that a boy who is a good athlete should go out for football, are in effect directing energy away from other activities. Effective norms in an area can reduce innovativeness in an area, not only deviant actions that harm others but also deviant actions that can benefit everyone.

QUESTION: How do communities balance the safety benefits of strong norms against their cost in reduced innovation and beneficial deviance? XREF: Connects to the classic tension between social order and creative disruption — echoes work on tight versus loose cultures and innovation.

As all these examples suggest, effective norms can constitute a powerful form of social capital. This social capital, however, like the forms described earlier, not only facilitates certain actions; it constrains others. A community with strong and effective norms about young persons' behavior can keep them from "having a good time." Norms that make it possible to walk alone at night also constrain the activities of criminals (and in some cases of noncriminals as well). Even prescriptive norms that reward certain actions, like the norm in a community that says that a boy who is a good athlete should go out for football, are in effect directing energy away from other activities. Effective norms in an area can reduce innovativeness in an area, not only deviant actions that harm others but also deviant actions that can benefit everyone.

DEFINE: Clarifies dual nature of norms as social capital — simultaneously facilitating and constraining, a nuance often missed in shorthand. Builds on: "Effective community norms suppress innovation alongside harmful deviance."

One property of social relations on which effective norms depend is what I will call closure. In general, one can say that a necessary but not sufficient condition for the emergence of effective norms is action that imposes external effects on others

DEFINE: Introduces 'closure' as a technical condition for effective norms, and distinguishes external effects as a necessary but not sufficient condition. Builds on: "Effective social norms both enable and constrain community action."

In the case of norms imposed by parents on children, closure of the structure requires a slightly more complex structure, which I will call intergenerational closure. Intergenerational closure may be described by a simple diagram that represents relations between parent and child and relations outside the family.

DEFINE: Introduces the concept of intergenerational closure, a structural mechanism for transmitting norms from parent to child through external family relations. Builds on: "Effective social norms require relational closure among group members"

The consequence of this closure is, as in the case of the wholesale diamond market or in other similar communities, a set of effective sanctions that can monitor and guide behavior. In the community in figure 2b, parents A and D can discuss their children's activities and come to some consensus about standards and about sanctions. Parent A is reinforced by parent D in sanctioning his child's actions; beyond that, parent D constitutes a monitor not only for his own child, C, but also for the other child, B. Thus, the existence of intergenerational closure provides a quantity of social capital available to each parent in raising his children-not only in matters related to school but in other matters as well.

DEFINE: Clarifies what 'intergenerational closure' means: connected parent networks that monitor and sanction each other's children. Builds on: "Parental norm enforcement requires intergenerational network closure beyond family relations."

Voluntary organizations are brought into being to aid some purpose of those who initiate them. In a housing project built during World War II in an eastern city of the United States, there were many physical problems caused by poor construction: faulty plumbing, crumbling sidewalks, and other defects (Merton, n.d.). Residents organized to confront the builders and to address these problems in other ways. Later, when the problems were solved, the organization remained as available social capital that improved the quality of life for residents. Residents had resources available that they had seen as unavailable where they had lived before. (For example, despite the fact that the number of teenagers in the community was smaller, residents were more likely to express satisfaction with the availability of teenage babysitters.)

XREF: Connects to Putnam's social capital work in Bowling Alone, where civic organizations similarly generate durable community trust.

Voluntary organizations are brought into being to aid some purpose of those who initiate them. In a housing project built during World War II in an eastern city of the United States, there were many physical problems caused by poor construction: faulty plumbing, crumbling sidewalks, and other defects (Merton, n.d.). Residents organized to confront the builders and to address these problems in other ways. Later, when the problems were solved, the organization remained as available social capital that improved the quality of life for residents.

DEFINE: Illustrates social capital: an organization formed to solve a specific problem outlives that problem and continues benefiting residents.

Printers in the New York Typographical Union who were monotype operators formed a Monotype Club as a social club (Lipset, Trow, and Coleman 1956). Later, as employers looked for monotype operators and as monotype operators looked for jobs, both found this organization an effective employment referral service and appropriated the organization for this purpose. Still later, when the Progressive Party came into power in the New York Union, the Monotype Club served as an organizational resource for the Independent Party as it left office. The Monotype Club subsequently served as an important source of social capital for the Independents to sustain the party as an organized opposition while it was out

Ordinarily, in the examination of the effects of various factors on achievement in school, "family background" is considered a single entity, distinguished from schooling in its effects. But there is not merely a single "family background"; family background is analytically separable into at least three different components: financial capital, human capital, and social capital. Financial capital is approximately measured by the family's wealth or income. It provides the physical resources that can aid achievement: a fixed place in the home for studying, materials to aid learning, the financial resources that smooth family problems. Human capital is approximately measured by parents' education and provides the potential for a cognitive environment for the child that aids learning.

In one public school district in the United States where texts for school use were purchased by children's families, school authorities were puzzled to discover that a number of Asian immigrant families purchased two copies of each textbook needed by the child. Investigation revealed that the family purchased the second copy for the mother to study in order to help her child do well in school. Here is a case in which the human capital of the parents, at least as measured traditionally by years of schooling, is low, but the social capital in the family available for the child's education is extremely high.

XREF: Relates to distinctions between human capital and social capital, and challenges standard metrics like years of schooling as proxies for educational support.

It is of course true that children are strongly affected by the human capital possessed by their parents. But this human capital may be irrelevant to outcomes for children if parents are not an important part of their children's lives, if their human capital is employed exclusively at work or elsewhere outside the home. The social capital of the family is the relations between children and parents (and, when families include other members, relationships with them as well). That is, if the human capital possessed by parents is not complemented by social capital embodied in family relations, it is irrelevant to the child's educational growth that the parent has a great deal, or a small amount, of human capital.

DEFINE: The highlight formally defines family social capital as the relations between children and parents, contrasting it with parental human capital. Builds on: "High parental social capital can outweigh low formal schooling."

These examples illustrate the importance of social capital within the family for a child's intellectual development. It is of course true that children are strongly affected by the human capital possessed by their parents. But this human capital may be irrelevant to outcomes for children if parents are not an important part of their children's lives, if their human capital is employed exclusively at work or elsewhere outside the home. The social capital of the family is the relations between children and parents (and, when families include other members, relationships with them as well). That is, if the human capital possessed by parents is not complemented by social capital embodied in family relations, it is irrelevant to the child's educational growth that the parent has a great deal, or a small amount, of human capital.

DEFINE: Social capital in the family is defined as the relations between children and parents, contrasted with parents' human capital.

Social capital within the family that gives the child access to the adult's human capital depends both on the physical presence of adults in the family and on the attention given by the adults to the child. The physical absence of adults may be described as a structural deficiency in family social capital. The most prominent element of structural deficiency in modern families is the single-parent family. However, the nuclear family itself, in which one or both parents work outside the home, can be seen as structurally deficient, lacking the social capital that comes with the presence of parents during the day, or with grandparents or aunts and uncles in or near the household.

However, the nuclear family itself, in which one or both parents work outside the home, can be seen as structurally deficient, lacking the social capital that comes with the presence of parents during the day, or with grandparents or aunts and uncles in or near the household.

QUESTION: What measurable effects does this structural deficiency have on child development outcomes?

Even if adults are physically present, there is a lack of social capital in the family if there are not strong relations between children and parents. The lack of strong relations can result from the child's embeddedness in a youth community, from the parents' embeddedness in relationships with other adults that do not cross generations, or from other sources. Whatever the source, it means that whatever human capital exists in the parents, the child does not profit from it because the social capital is missing.

Builds on: "Parental human capital requires family social capital to benefit children."

The analysis is carried out by use of a weighted logistic model with a random sample of 4,000 students from the public schools in the sample. The variables included in the model as measures of the family's financial, human, and social capital were socioeconomic status (a single variable constructed of parents' education, parents' income, father's occupational status, and household possessions), race, Hispanic ethnicity, number of siblings, number of changes in school due to family residential moves since fifth grade, whether mother worked before the child was in school, mother's expectation of child's educational attainment, frequency of discussions with parents about personal matters, and presence of both parents in the household.

XREF: Classic social capital literature (Coleman, Teachman) links family structure and resources to educational attainment.

Item 1 of table 1 shows that, when other family resources are controlled, the percentage of students who drop out between spring of the sophomore year and spring of the senior year is 6 percentage points higher for children from single-parent families. Item 2 of table 1 shows that the rate is 6.4 percentage points higher for sophomores with four siblings than for those with otherwise equivalent family resources but only one sibling. Or, taking these two together, we can think of the ratio of adults to children as a measure of the social capital in the family available for the education of any one of them.

XREF: The adult-to-child ratio as a social capital measure parallels broader work on resource scarcity and household investment in children. Builds on: "Working parents and single parenthood deplete family social capital."

With the three sources of family social capital taken together, item 5 of the table shows that sophomores with one sibling, two parents, and a mother's expectation for college (still controlling on other resources of family) have an 8.1% dropout rate; with four siblings, one parent, and no expectation of the mother for college, the rate is 30.6%.

XREF: Connects to broader literature on educational attainment and family background effects, echoing Bourdieu's social capital theory. Builds on: "Single-parent and large families raise teen dropout rates significantly."

The social capital that has value for a young person's development does not reside solely within the family. It can be found outside as well in the community consisting of the social relationships that exist among parents, in the closure exhibited by this structure of relations, and in the parents' relations with the institutions of the community.

DEFINE: Clarifies that social capital extends beyond the family to encompass community-level parent relationships and institutional ties.

The effect of this social capital outside the family on educational outcomes can be seen by examining outcomes for children whose parents differ in the particular source of social capital discussed earlier, intergenerational closure. There is not a direct measure of intergenerational closure in the data, but there is a proximate indicator. This is the number of times the child has changed schools because the family moved. For families that have moved often, the social relations that constitute social capital are broken at each move.

XREF: Connects to Coleman's concept of social capital and residential mobility research on child development outcomes.

The logistic regression carried out earlier and reported in table Al shows that the coefficient for number of moves since grade 5 is 10 times its standard error, the variable with the strongest overall effect of any variable in the equation, including the measures of human and financial capital in the family (socioeconomic status) and the crude measures of family social capital introduced in the earlier analysis. Translating this into an effect on dropping out gives 11.8% as the dropout rate if the family has not moved, 16.7% if it has moved once, and 23.1% if it has

QUESTION: Why does moving so strongly predict dropout even controlling for socioeconomic status? Is it disruption of social capital, or an unmeasured confounder? Builds on: "Frequent family moves disrupt social capital and harm outcomes."

These families have intergenerational closure that is based on a multiplex relation: whatever other relations they have, the adults are members of the same religious body and parents of children in the same school. In contrast, it is the independent private schools that are typically least surrounded by a community, for their student bodies are collections of students, most of whose families have no contact. The choice of private school for most of these parents is an individualistic one, and, although they back their children with extensive human capital, they send their children to these schools denuded of social capital.

What is most striking is the low dropout rate in Catholic schools. The rate is a fourth of that in the public schools and a third of that in the other private schools.

Builds on: "Religious schools build community ties that private schools lack."

Adjusting the dropout rates for differences in student-body financial, human, and social capital among the three sets of schools by standardizing the population of the Catholic schools and other private schools to the student-body backgrounds of the public schools shows that the differences are affected only slightly. Furthermore, the differences are not due to the religion of the students or to the degree of religious observance. Catholic students in public school are only slightly less likely to drop out than non-Catholics.

XREF: This aligns with Coleman's school-effects research on Catholic schools and social capital, often cited in sociology of education debates about school quality vs. selection effects. Builds on: "What is most striking is the low dropout rate in Catholic schools."

Frequency of attendance at religious services, which is itself a measure of social capital through intergenerational closure, is strongly related to dropout rate, with 19.5% of public school students who rarely or never attend dropping out compared with 9.1% of those who attend often. But this effect exists apart from, and in addition to, the effect of the school's religious affiliation.

XREF: Connects to social capital theory and measures of community cohesion beyond just institutional affiliation.

The average number of moves for public school students is .57; for Catholic school students, .35; and for students in other private schools, .88.

The low dropout rates of the Catholic schools, the absence of low dropout rates in the other private schools, and the independent effect of frequency of religious attendance all provide evidence of the importance of social capital outside the school, in the adult community surrounding it, for this outcome of education.

Builds on: "Catholic school dropout advantages persist even after statndardizing for student backgrounds."

A further test is possible, for there were eight schools in the sample of non-Catholic private schools ("other private" in the analysis above) that have religious foundations and over 50% of the student body of that religion. Three were Baptist schools, two were Jewish, and three from three other denominations. If the inference is correct about the religious community's providing intergenerational closure and thus social capital and about the importance of social capital in depressing the chance of dropping out of high school, these schools also should show a lower dropout rate than the independent private schools. Item 3 of table 2 shows that their dropout rate is lower, 3.7%, essentially the same as that of the Catholic schools.

XREF: Extends the intergenerational closure and social capital argument tested earlier with Catholic schools to non-Catholic religious schools, strengthening the generalizability of the finding. Builds on: "Community social capital reduces dropout rates more than school structure alone"

It is also true, though not presented here, that the lack of social capital in the family makes little difference in dropout rates in Catholic schools-or, in the terms I have used, social capital in the community compensates in part for its absence in the family. See Coleman and Hoffer (1987, chap. 5).

XREF: Connect to Coleman's broader framework of social capital and its compensating effects across family, school, and community. Builds on: "Community social capital reduces dropout rates more than school structure alone"

But most forms of social capital are not like this. For example, the kinds of social structures that make possible social norms and the sanctions that enforce them do not benefit primarily the person or persons whose efforts would be necessary to bring them about, but benefit all those who are part of such a structure. For example, in some schools where there exists a dense set of associations among some parents, these are the result of a small number of persons, ordinarily mothers who do not hold full-time jobs outside the home. Yet these mothers themselves experience only a subset of the benefits of this social capital surrounding the school. If one of them decides to abandon these activities-for example, to take a full-time job-this may be an entirely reasonable action from a personal point of view and even from the point of view of that household with its children. The benefits of the new activity may far outweigh the losses that arise from the decline in associations with other parents whose children are in the school. But the withdrawal of these activities constitutes a loss to all those other parents whose associations and contacts were dependent on them.

XREF: Connects to the broader concept of public goods/externalities in economics, where individual actors bear costs but collective groups reap benefits.

For example, in some schools where there exists a dense set of associations among some parents, these are the result of a small number of persons, ordinarily mothers who do not hold full-time jobs outside the home. Yet these mothers themselves experience only a subset of the benefits of this social capital surrounding the school. If one of them decides to abandon these activities-for example, to take a full-time job-this may be an entirely reasonable action from a personal point of view and even from the point of view of that household with its children. The benefits of the new activity may far outweigh the losses that arise from the decline in associations with other parents whose children are in the school. But the withdrawal of these activities constitutes a loss to all those other parents whose associations and contacts were dependent on them.

Builds on: "Social capital often benefits non-producers more than producers."

Similarly, the decision to move from a community so that the father, for example, can take a better job may be entirely correct from the point of view of that family. But, because social capital consists of relations among persons, other persons may experience extensive losses by the severance of those relations, a severance over which they had no control.

Similar statements can be made with respect to trustworthiness as social capital. An actor choosing to keep trust or not (or choosing whether to devote resources to an attempt to keep trust) is doing so on the basis of costs and benefits he himself will experience. That his trustworthiness will facilitate others' actions or that his lack of trustworthiness will inhibit others' actions does not enter into his decision. A similar but more qualified statement can be made for information as a form of social capital. An individual who serves as a source of information for another because he is well informed ordinarily acquires that information for his own benefit, not for the others who make use of him.

DEFINE: Clarifies social capital theory: trust and information flow from self-interested motives, with benefits to others being incidental.

For norms also, the statement must be qualified. Norms are intentionally established, indeed as means of reducing externalities, and their benefits are ordinarily captured by those who are responsible for establishing them. But the capability of establishing and maintaining effective norms depends on properties of the social structure (such as closure) over which one actor does not have control yet are affected by one actor's action.

DEFINE: Clarifies the scope of 'norm' — intentional establishment aimed at reducing externalities — and the social-structural conditions (like closure) that determine whether such norms actually work.

Because the social structural conditions that overcome the problems of supplying these public goods-that is, strong families and strong communities-are much less often present now than in the past, and promise to be even less present in the future, we can expect that, ceteris paribus, we confront a declining quantity of human capital embodied in each successive generation. The obvious solution appears to be to attempt to find ways of overcoming the problem of supply of these public goods, that is, social capital employed for the benefit of children and youth. This very likely means the substitution of some kind of formal organization for the voluntary and spontaneous social organization that has in the past been the major source of social capital available to the young.

XREF: Connects to Putnam's 'Bowling Alone' thesis about declining civic and community institutions. SEED: Could be an essay angle: whether formal organizations (schools, programs) can genuinely replace the social capital once supplied by strong families and communities.

Because the social structural conditions that overcome the problems of supplying these public goods-that is, strong families and strong communities-are much less often present now than in the past, and promise to be even less present in the future, we can expect that, ceteris paribus, we confront a declining quantity of human capital embodied in each successive generation. … This very likely means the substitution of some kind of formal organization for the voluntary and spontaneous social organization that has in the past been the major source of social capital available to the young.

QUESTION: How do formal organizations substitute for lost voluntary social capital, and can they effectively fill the gap?

In explicating the concept of social capital, three forms were identified: obligations and expectations, which depend on trustworthiness of the social environment, information-flow capability of the social structure, and norms accompanied by sanctions. A property shared by most forms of social capital that differentiates it from other forms of capital is its public good aspect: the actor or actors who generate social capital ordinarily capture only a small part of its benefits, a fact that leads to underin-

DEFINE: Defines social capital and its three forms while clarifying the distinctive public good aspect that sets it apart from other capital forms.