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Miss Qianyao YE
Ph.D. Candidate of Economics
Yale University

This paper examines the impact of social capital on child development. It is innovative in measuring social capital at the individual level by using a latent factor model and a novel neighborhood survey from the Project on Human Development in Chicago Neighborhoods. Social capital reflects neighborhood connectedness and neighbors’ engagement in child support and monitoring. I study the roles of social capital and parental investments in skill development within a unified framework and estimate a dynamic skill production function for children aged 6-15. Leveraging a natural experiment from the Chicago public housing demolition, I find that social capital is important for both cognitive and socio-emotional skills. Parental investments are effective for cognitive skills during these ages. Counterfactual experiments suggest that increasing social capital levels in low-socioeconomic-status (SES) neighborhoods to those in high-SES neighborhoods could reduce the skill gap between high-SES and low-SES children by 25% for cognitive skills and 80% for socio-emotional skills.